Société Générale notes a consistent seasonal pattern in FX markets where the US dollar tends to weaken in April, followed by a stronger recovery in May. This trend has been observed 65% of the time since 2004, suggesting a non-random phenomenon. On average, the dollar index declines by 0.5% in April and rebounds by approximately 0.9% in May.
Key Points:
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Seasonal Influence on FX Markets: Economic activities and financial markets often exhibit seasonal trends, including a notable pattern for the US dollar’s performance.
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Historical USD Performance: Analysis of the past two decades reveals that the dollar index typically experiences a slight downturn in April, followed by a more substantial recovery in May.
Conclusion:
The seasonal trend of the US dollar’s performance, with a downturn in April and a stronger rebound in May, highlights the importance of considering seasonal factors in FX market analysis. Investors and traders might benefit from adjusting their strategies based on this historical pattern to capitalize on the expected movements of the dollar index during these months.
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