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Month-to-month Foreign exchange Seasonality – January 2022: Begin of 12 months Bodes Properly for AUD, GBP, Gold

month-to-month-foreign-exchange-seasonality-–-january-2022:-begin-of-12-months-bodes-properly-for-aud,-gbp,-gold

January FX Seasonality Overview:

  • The primary month of the 12 months tends to see beneficial properties for commodities and commodity-linked currencies.
  • January is the perfect month of the 12 months for gold costs in latest historical past.
  • Typical losses by the US Greenback are likely to bode effectively for Australian, Canadian, and New Zealand {Dollars}.

The start of the month warrants a evaluation of the seasonal patterns which have influenced foreign exchange markets over the previous a number of years. For December, our focus is on the trailing 5-year and 10-year performances, each of which absolutely seize buying and selling throughout the period of quantitative easing and increasing authorities deficits because the 2008/2009 World Monetary Disaster – not dissimilar from the atmosphere we discover ourselves in throughout the coronavirus pandemic restoration.

Nevertheless, a caveat is required firstly of 2022: we’re originally levels of a Fed hike cycle. Asset purchases will stop by March, the place charges markets are at the moment pricing within the first 25-bps fee hike from the FOMC. Environments through which the Federal Reserve is mountaineering charges whereas different main central banks – primarily the Financial institution of Japan and European Central Financial institution – are persisting with stimulative insurance policies have a tendency to provide bullish outcomes for the US Greenback.

Insofar as each EUR/USD and USD/JPY seasonality metrics are likely to favor US Greenback weak point, it might be finest to low cost that perspective this month. The identical goes for gold costs, which generally have had a powerful begin to the 12 months; a stronger US Greenback and rising US Treasury yields are usually damaging for bullion.

Month-to-month Foreign exchange Seasonality Abstract – January 2022

Monthly Forex Seasonality - January 2022: Start of Year Bodes Well for AUD, GBP, Gold

Foreign exchange Seasonality in Euro (through EUR/USD)

Monthly Forex Seasonality - January 2022: Start of Year Bodes Well for AUD, GBP, Gold

January is a bullish month for EUR/USD, from a seasonality perspective. Over the previous 5-years, it has been the third finest month of the 12 months for the pair, averaging a acquire of +0.84%. Over the previous 10-years, it has been the sixth finest month of the 12 months, averaging a lack of -0.08%.

Foreign exchange Seasonality in British Pound (through GBP/USD)

Monthly Forex Seasonality - January 2022: Start of Year Bodes Well for AUD, GBP, Gold

January is a bullish month for GBP/USD, from a seasonality perspective. Over the previous 5-years, it has been the perfect month of the 12 months for the pair, averaging a acquire of +1.93%. Over the previous 10-years, it has been the fourth finest month of the 12 months, averaging a acquire of +0.12%.

Foreign exchange Seasonality in Japanese Yen (through USD/JPY)

Monthly Forex Seasonality - January 2022: Start of Year Bodes Well for AUD, GBP, Gold

January is a very bearish for USD/JPY, from a seasonality perspective. Over the previous 5-years, it has been the worst month of the 12 months for the pair, averaging a lack of -1.25%. Over the previous 10-years, it has been the worst month of the 12 months, averaging a lack of -0.56%.

Foreign exchange Seasonality in Australian Greenback (through AUD/USD)

Monthly Forex Seasonality - January 2022: Start of Year Bodes Well for AUD, GBP, Gold

January is a bullish month for AUD/USD, from a seasonality perspective. Over the previous 5-years, it has been the second finest month of the 12 months for the pair, averaging a acquire of +1..24%. Over the previous 10-years, it has been the fifth finest month of the 12 months, averaging a acquire of +0.09%.

Foreign exchange Seasonality in New Zealand Greenback (through NZD/USD)

Monthly Forex Seasonality - January 2022: Start of Year Bodes Well for AUD, GBP, Gold

January is a bullish month for NZD/USD, from a seasonality perspective. Over the previous 5-years, it has been the second finest month of the 12 months for the pair, averaging a acquire of +1.64%. Over the previous 10-years, it has been the fifth finest month of the 12 months, averaging a acquire of +0.28%.

Foreign exchange Seasonality in Canadian Greenback (through USD/CAD)

Monthly Forex Seasonality - January 2022: Start of Year Bodes Well for AUD, GBP, Gold

January is a combined month for USD/CAD, from a seasonality perspective. Over the previous 5-years, it has been the worst month of the 12 months for the pair, averaging a lack of -1.31%. Over the previous 10-years, it has been the third finest month of the 12 months, averaging a acquire of +0.74%.

Foreign exchange Seasonality in Swiss Franc (through USD/CHF)

Monthly Forex Seasonality - January 2022: Start of Year Bodes Well for AUD, GBP, Gold

January is a very bearish month for USD/CHF, from a seasonality perspective. Over the previous 5-years, it has been the third worst month of the 12 months for the pair, averaging a lack of -1.17%. Over the previous 10-years, it has been the worst month of the 12 months, averaging a lack of -1.22%.

Foreign exchange Seasonality in US S&P 500

Monthly Forex Seasonality - January 2022: Start of Year Bodes Well for AUD, GBP, Gold

January is a bullish for the US S&P 500, from a seasonality perspective. Over the previous 5-years, it has been the fourth finest month of the 12 months for the index, averaging a acquire of +2.8%. Over the previous 10-years, it has been the sixth finest month of the 12 months, averaging a acquire of +1.17%.

Foreign exchange Seasonality in Gold (through XAU/USD)

Monthly Forex Seasonality - January 2022: Start of Year Bodes Well for AUD, GBP, Gold

January is a very bullish month for gold (XAU/USD), from a seasonality perspective. Over the previous 5-years, it has been the second finest month of the 12 months for the dear metallic, averaging a acquire of +2.77%. Over the previous 10-years, it has been the perfect month of the 12 months, averaging a acquire of +4.15%.

— Written by Christopher Vecchio, CFA, Senior Strategist

DailyFX gives foreign exchange information and technical evaluation on the traits that affect the worldwide forex markets.

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