USD Strong, AUD & NZD Weak, Stocks Mixed

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February FX Seasonality Overview:

  • February tends to be a risk-off type of month, with the Japanese Yen and US Dollar faring higher than growth-linked currencies just like the Australian and New Zealand Dollars.
  • US shares are inclined to have a blended efficiency, however the previous 5-years have usually produced losses for the key indexes.
  • Despite a bid in secure haven currencies, gold costs have a tendency to say no in February.

The starting of the month warrants a evaluation of the seasonal patterns which have influenced foreign exchange markets over the previous a number of years. For February, our focus is on the trailing 5-year and 10-year performances, each of which totally seize buying and selling through the period of quantitative easing and increasing authorities deficits for the reason that 2008/2009 Global Financial Crisis – not dissimilar from the surroundings we discover ourselves in through the coronavirus pandemic restoration.

Now that we’re in a time period the place central banks are beginning to finish their QE packages and lift rates of interest, alongside a big discount in fiscal stimulus efforts by governments, it could be the case that the 5-year averages are particularly helpful guideposts to assist perceive how FX, shares, and valuable metals will performing over the following month.

Monthly Forex Seasonality Summary – February 2022

Forex Seasonality in Euro (by way of EUR/USD)

Monthly Forex Seasonality – February 2022: USD Strong, AUD & NZD Weak, Stocks Mixed

February is a very bearish month for EUR/USD, from a seasonality perspective. Over the previous 5-years, it has been the worst month of the yr for the pair, averaging a lack of -1.12%. Over the previous 10-years, it has been the fourth worst month of the yr, averaging a lack of -0.57%.

Forex Seasonality in British Pound (by way of GBP/USD)

Monthly Forex Seasonality – February 2022: USD Strong, AUD & NZD Weak, Stocks Mixed

February is a very bearish month for GBP/USD, from a seasonality perspective. Over the previous 5-years, it has been the second worst month of the yr for the pair, averaging a lack of -0.94%. Over the previous 10-years, it has been the second worst month of the yr, averaging a lack of -0.60%.

Forex Seasonality in Japanese Yen (by way of USD/JPY)

Monthly Forex Seasonality – February 2022: USD Strong, AUD & NZD Weak, Stocks Mixed

February isa impartial month for USD/JPY, from a seasonality perspective. Over the previous 5-years, it has been the sixth greatest month of the yr for the pair, averaging a acquire of +0.27%. Over the previous 10-years, it has been the sixth worst month of the yr, averaging a acquire of +0.33%.

Forex Seasonality in Australian Dollar (by way of AUD/USD)

Monthly Forex Seasonality – February 2022: USD Strong, AUD & NZD Weak, Stocks Mixed

February is a very bearish month for AUD/USD, from a seasonality perspective. Over the previous 5-years, it has been the second worst month of the yr for the pair, averaging a lack of -1.40%. Over the previous 10-years, it has been the fifth worst month of the yr, averaging a lack of -0.46%.

Forex Seasonality in New Zealand Dollar (by way of NZD/USD)

Monthly Forex Seasonality – February 2022: USD Strong, AUD & NZD Weak, Stocks Mixed

February isa bearish month for NZD/USD, from a seasonality perspective. Over the previous 5-years, it has been the third worst month of the yr for the pair, averaging a lack of -1.62%. Over the previous 10-years, it has been the fourth worst month of the yr, averaging a acquire of +0.06%.

Forex Seasonality in Canadian Dollar (by way of USD/CAD)

Monthly Forex Seasonality – February 2022: USD Strong, AUD & NZD Weak, Stocks Mixed

February is a very bullish month for USD/CAD, from a seasonality perspective. Over the previous 5-years, it has been the most effective month of the yr for the pair, averaging a acquire of +1.52%. Over the previous 10-years, it has been the fifth greatest month of the yr, averaging a acquire of +0.43%.

Forex Seasonality in Swiss Franc (by way of USD/CHF)

Monthly Forex Seasonality – February 2022: USD Strong, AUD & NZD Weak, Stocks Mixed

February is a very bullish month for USD/CHF, from a seasonality perspective. Over the previous 5-years, it has been the second greatest month of the yr for the pair, averaging a acquire of +1.14%. Over the previous 10-years, it has been the fourth greatest month of the yr, averaging a acquire of +0.53%.

Forex Seasonality in US S&P 500

Monthly Forex Seasonality – February 2022: USD Strong, AUD & NZD Weak, Stocks Mixed

February isa blended month for the US S&P 500, from a seasonality perspective. Over the previous 5-years, it has been the third worst month of the yr for the index, averaging a lack of -0.60%. Over the previous 10-years, it has been the sixth worst month of the yr, averaging a acquire of +1.15%.

Forex Seasonality in Gold (by way of XAU/USD)

Monthly Forex Seasonality – February 2022: USD Strong, AUD & NZD Weak, Stocks Mixed

February is a bearish month for gold (XAU/USD), from a seasonality perspective. Over the previous 5-years, it has been the third worst month of the yr for the dear metallic, averaging a lack of -1.17%. Over the previous 10-years, it has been the sixth worst of the yr, averaging a lack of -0.14%.

— Written by Christopher Vecchio, CFA, Senior Strategist

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