March FX Seasonality Overview:
- March typically brings a risk-off tone, with the US Dollar faring better than all of the other major currencies.
- The commodity currencies – the Australian, Canadian, and New Zealand Dollars – tend to have the worst performance.
- Like last month, US stocks tend to have a mixed performance, with a divergence between the 5- and 10-year averages..
The beginning of the month warrants a review of the seasonal patterns that have influenced forex markets over the past several years. For February, our focus is on the trailing 5-year and 10-year performances, both of which fully capture trading during the era of quantitative easing and expanding government deficits since the 2008/2009 Global Financial Crisis – not dissimilar from the environment we find ourselves in during the coronavirus pandemic recovery.
There is a big caveat with this month’s seasonality review, however: the Russian invasion of Ukraine has provoked a significant wave of volatility, pushing prices higher and lower violently across asset classes. If there has been a month in recent memory whereby seasonality tendencies may want to be downgraded in terms of their reliability or actionability, this March would be that month.
Monthly Forex Seasonality Summary – March 2022
Forex Seasonality in Euro (via EUR/USD)
March is a bearish month for EUR/USD, from a seasonality perspective. Over the past 5-years, it has been the fourth worst month of the year for the pair, averaging a loss of -0.47%. Over the past 10-years, it has been the sixth worst month of the year, averaging a loss of -0.38%.
Forex Seasonality in British Pound (via GBP/USD)
March is a bearish month for GBP/USD, from a seasonality perspective. Over the past 5-years, it has been the third worst month of the year for the pair, averaging a loss of -0.54%. Over the past 10-years, it has been the fourth worst month of the year, averaging a loss of -0.32%.
Forex Seasonality in Japanese Yen (via USD/JPY)
March is a bullish month for USD/JPY, from a seasonality perspective. Over the past 5-years, it has been the fifth best month of the year for the pair, averaging a gain of +0.30%. Over the past 10-years, it has been the fourth best month of the year, averaging a gain of +0.71%.
Forex Seasonality in Australian Dollar (via AUD/USD)
March is a very bearish month for AUD/USD, from a seasonality perspective. Over the past 5-years, it has been the worst month of the year for the pair, averaging a loss of -1.74%. Over the past 10-years, it has been the sixth worst month of the year, averaging a loss of -0.18%.
Forex Seasonality in New Zealand Dollar (via NZD/USD)
March is a bearish month for NZD/USD, from a seasonality perspective. Over the past 5-years, it has been the worst month of the year for the pair, averaging a loss of -2.07%. Over the past 10-years, it has been the third worst month of the year, averaging a loss of -0.38%.
Forex Seasonality in Canadian Dollar (via USD/CAD)
March is a very bullish month for USD/CAD, from a seasonality perspective. Over the past 5-years, it has been the second best month of the year for the pair, averaging a gain of +1.10%. Over the past 10-years, it has been the sixth best month of the year, averaging a gain of +0.24%.
Forex Seasonality in Swiss Franc (via USD/CHF)
March is a bullish month for USD/CHF, from a seasonality perspective. Over the past 5-years, it has been the third best month of the year for the pair, averaging a gain of +0.77%. Over the past 10-years, it has been the sixth best month of the year, averaging a gain of +0.37%.
Forex Seasonality in US S&P 500
March is a mixed month for the US S&P 500, from a seasonality perspective. Over the past 5-years, it has been the worst month of the year for the index, averaging a loss of -1.84%. Over the past 10-years, it has been the third worst month of the year, averaging a gain of +0.31%.
Forex Seasonality in Gold (via XAU/USD)
March is a bearish month for gold (XAU/USD), from a seasonality perspective. Over the past 5-years, it has been the fourth worst month of the year for the precious metal, averaging a loss of -0.61%. Over the past 10-years, it has been the fourth worst of the year, averaging a loss of -0.97%.
--- Written by Christopher Vecchio, CFA, Senior Strategist
