June FX Seasonality Overview:
- If “sell in May and go away” was nonsense, it’s because risk appetite has remained strong through the end of June. The US S&P 500 is in positive territory in June over the past 5-year and 10-year averages.
- The trio of commodity currencies are embarking on their best month of the year. Historically speaking, the Australian, Canadian, and New Zealand Dollars have had their best month of the year during June.
- May was supposed to be the best month of the year for the US Dollar. Failure to liftoff with seasonal tailwinds may foreshadow a rough month of June, which is otherwise one of the worst months of the year for the greenback.
The beginning of the month warrants a review of the seasonal patterns that have influenced forex markets over the past several years. For June, 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 – June 2021
Forex Seasonality in Euro (via EUR/USD)
June is a bullish month for EUR/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 +0.87%. Over the past 10-years, it has been the second best of the year, averaging a gain of +0.95%.
Forex Seasonality in British Pound (via GBP/USD)
June is a very bearish month for GBP/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 -1.35%. Over the past 10-years, it has been the fifth worst month of the year, averaging a loss of -0.22%.
Forex Seasonality in Japanese Yen (via USD/JPY)
June is a very bearish month for USD/JPY, 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 -0.78%. Over the past 10-years, it has been the third worst month of the year, averaging a loss of -0.62%.
Forex Seasonality in Australian Dollar (via AUD/USD)
June is a very bullish month for AUD/USD, 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 +1.81%. Over the past 10-years, it has been the best month of the year, averaging a gain +1.23%.
Forex Seasonality in New Zealand Dollar (via NZD/USD)
June is a very bullish month for NZD/USD, 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 +2.51%. Over the past 10-years, it has been the best month of the year, averaging a gain of +1.51%.
Forex Seasonality in Canadian Dollar (via USD/CAD)
June is a very bearish month for USD/CAD, from a seasonality perspective. Over the past 5-years, it has been the worst month of the year for the pair, averaging a loss of -1.7%. Over the past 10-years, it has been the second worst month of the year, averaging a loss of -1.05%.
Forex Seasonality in Swiss Franc (via USD/CHF)
June is a very bearish month for USD/CHF, 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 -1.25%. Over the past 10-years, it has been the worst month of the year, averaging a loss of -1.27%.
Forex Seasonality in US S&P 500
June is a bullish month for the US S&P 500, from a seasonality perspective. Over the past 5-years, it has been the fifth best month of the year for the index, averaging a gain of +1.96%. Over the past 10-years, it has been the seventh best month of the year, averaging a gain of +1.02%. Not only are the June seasonal averages positive for the US S&P 500, but so too are the 5- and 10-year seasonal averages for July; ‘sell in June and go away’ hasn’t been valid recently (but then again, if you look at December, neither too has been the famed Santa Claus rally).
Forex Seasonality in Gold (via XAU/USD)
June is a bullish month for gold (XAU/USD), from a seasonality perspective. Over the past 5-years, it has been the third best month of the year for the precious metal, averaging a gain of +2.8%. Over the past 10-years, it has been the sixth best month of the year, averaging a gain of +0.77%.
--- Written by Christopher Vecchio, CFA, Senior Currency Strategist
