Monthly Forex Seasonality – March 2021: ‘Dollars’ Mixed but Gold, Stocks Favor Weakness

March FX Seasonality Overview:

• In recent years, March has produced EUR/USD gains, losses by USD/JPY, gold, and stocks. It’s a mixed bag.
• US Dollar seasonality (via-a-vis the DXY Index) has been negative over the past 5-years (-0.61%), but positive over the past 10-years (+0.09%).
• Gold prices typically struggle in March, as evidenced by both the 5-year (-0.4%) and 10-year (-0.67%) performances.

The beginning of the month warrants a review of the seasonal patterns that have influenced forex markets over the past several years. For March, 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.

Monthly Forex Seasonality Summary – March 2021

Forex Seasonality in Euro (via EUR/USD)

March is a bullish month for EUR/USD, 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 +1.03%. Over the past 10-years, it has been the sixth best month of the year, averaging a gain of +0.16%.

Forex Seasonality in British Pound (via GBP/USD)

March is a mixed month for GBP/USD, 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 +0.31%. Over the past 10-years, it has been the third worst month of the year, averaging a loss of -0.36%.

Forex Seasonality in Japanese Yen (via USD/JPY)

March is a mixed month for USD/JPY, from a seasonality perspective. Over the past 5-years, it has been the sixth worst month of the year for the pair, averaging a loss of -0.50%. Over the past 10-years, it has been the fifth best month of the year, averaging a gain of +0.49%.

Forex Seasonality in Australian Dollar (via AUD/USD)

March is a mixed month for AUD/USD, from a seasonality perspective. Over the past 5-years, it has been the fifth worst month of the year for the pair, averaging a loss of -0.02%. Over the past 10-years, it has been the fifth best month of the year, averaging a gain +0.10%.

Forex Seasonality in New Zealand Dollar (via NZD/USD)

March is a mixed month for NZD/USD, from a seasonality perspective. Over the past 5-years, it has been the fifth worst month of the year for the pair, averaging a loss of -0.42%. Over the past 10-years, it has been the fifth worst month of the year, averaging a gain of +0.08%.

Forex Seasonality in Canadian Dollar (via USD/CAD)

March is a bullish month for USD/CAD, from a seasonality perspective. Over the past 5-years, it has been the fourth best month of the year for the pair, averaging a gain of +0.59%. Over the past 10-years, it has been the sixth best month of the year, averaging a gain of +0.37%.

Forex Seasonality in Swiss Franc (via USD/CHF)

March is a bearish month for USD/CHF, 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 -0.74%. Over the past 10-years, it has been the sixth worst month of the year, averaging a loss of -0.12%.

Forex Seasonality in US S&P 500

March is a very bearish 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 -1.37%. Over the past 10-years, it has been the second worst month of the year, averaging a loss of -0.13%.

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 -0.40%. Over the past 10-years, it has been the fourth worst of the year, averaging a loss of -0.67%.

— Written by Christopher Vecchio, CFA, Senior Currency Strategist