Monthly Forex Seasonality – October 2021: Good News for US Dollar, Bad News for Risk

Monthly Forex Seasonality – October 2021: Good News for US Dollar, Bad News for Risk

October FX Seasonality Overview:

  • The start of the fourth quarter typically sees US Dollar strength, which portends well for continuation of recent greenback gains.
  • October has been a mixed period for US stocks, but losses have been more pronounced in recent years (5-year average is negative, 10-year average is positive).
  • With higher yielding currencies and risk-correlated assets pressured, October tends to produce minor gains for gold prices.

The beginning of the month warrants a review of the seasonal patterns that have influenced forex markets over the past several years. For October, 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 – October 2021

Forex Seasonality in Euro (via EUR/USD)

Monthly Forex Seasonality - October 2021: Good News for US Dollar, Bad News for Risk

October is a very bearish month for EUR/USD, from a seasonality perspective. Over the past 5-years, it has been the second worst month of the year for the pair, averaging a loss of -0.90%. Over the past 10-years, it has been the fifth worst of the year, averaging a loss of -0.22%.

Forex Seasonality in British Pound (via GBP/USD)

Monthly Forex Seasonality - October 2021: Good News for US Dollar, Bad News for Risk

October is a bearish month for GBP/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 -0.60%. Over the past 10-years, it has been the seventh month of the year, averaging a gain of -0.03%.

Forex Seasonality in Japanese Yen (via USD/JPY)

Monthly Forex Seasonality - October 2021: Good News for US Dollar, Bad News for Risk

August is a very bullish month for USD/JPY, 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 +0.59%. Over the past 10-years, it has been the second best month of the year, averaging a gain of +0.98%.

Forex Seasonality in Australian Dollar (via AUD/USD)

Monthly Forex Seasonality - October 2021: Good News for US Dollar, Bad News for Risk

October is a mixed month for AUD/USD, from a seasonality perspective. Over the past 5-years, it has been the second worst month of the year for the pair, averaging a loss of -0.96%. Over the past 10-years, it has been the third best month of the year, averaging a gain of +0.79%.

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

Monthly Forex Seasonality - October 2021: Good News for US Dollar, Bad News for Risk

October is a mixed month for NZD/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 -1.21%. Over the past 10-years, it has been the fifth best month of the year, averaging a gain of +0.42%.

Forex Seasonality in Canadian Dollar (via USD/CAD)

Monthly Forex Seasonality - October 2021: Good News for US Dollar, Bad News for Risk

October is a very bullish month for USD/CAD, from a seasonality perspective. Over the past 5-years, it has been the best month of the year for the pair, averaging a gain of +1.37%. Over the past 10-years, it has been the fifth best month of the year, averaging a gain of +0.38%.

Forex Seasonality in Swiss Franc (via USD/CHF)

Monthly Forex Seasonality - October 2021: Good News for US Dollar, Bad News for Risk

October is a very bullish month for USD/CHF, from a seasonality perspective. Over the past 5-years, it has been the best month of the year for the pair, averaging a gain of +1.2%. Over the past 10-years, it has been the fourth best month of the year, averaging a gain of +0.42%.

Forex Seasonality in US S&P 500

Monthly Forex Seasonality - October 2021: Good News for US Dollar, Bad News for Risk

October 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 -1.48%. Over the past 10-years, it has been the fourth best month of the year, averaging a gain of +1.65%.

Forex Seasonality in Gold (via XAU/USD)

Monthly Forex Seasonality - October 2021: Good News for US Dollar, Bad News for Risk

October is a slightly bullish month for gold (XAU/USD), from a seasonality perspective. Over the past 5-years, it has been the eighth best month of the year, averaging a gain of +0.16%. Over the past 10-years, it has been the seventh best month of the year, averaging a gain of +0.25%.

— Written by Christopher Vecchio, CFA, Senior Strategist

element inside the element. This is probably not what you meant to do!
Load your application’s JavaScript bundle inside the element instead.

Originally Posted on: https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2021/10/01/monthly-forex-seasonality-october-2021-good-news-for-us-dollar-bad-news-for-risk.html
By: Christopher Vecchio, CFA

Written by:

6,328 Posts

View All Posts
Follow Me :

Leave a Reply

%d bloggers like this: