Seasonality cannot always be explained but it’s certainly another pattern to look out for. The team at ANZ show that February is a good month for going long Aussie against the USD:
Here is their view, courtesy of eFXnews:
Long AUD/USD is the best seasonal FX trade for the month of February, notes Australia and New Zealand Banking Group (ANZ).
“Figure 1 shows how G10 and Asian currencies have performed during the month of February over the 2000-15 period. Among the G10 currencies, the AUD has shown the highest tendency to appreciate against the USD, rising in 12 out of the last 16 years during February.
Last year, despite the RBA cutting the cash rate by 25bps at their February meeting, the AUD still managed to appreciate by 0.6% in the month. However, the historical overall average percentage spot gain for the AUD is not large at 0.6%. This is because during years when the AUD goes against the seasonal pattern, the declines has tended to be very large – between 2% and 4.4%,” ANZ clarifies.
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