The winners and losers of the foreign exchange market in May, and what to watch out for in June?

Here’s a little clue.

Yes, that may not have been the case, but the dollar was actually at its weakest in May. Here’s how the major currencies performed against the greenback during the month:

  • EUR +1.7%
  • JPY +0.3%
  • GBP +2.0%
  • CHF +1.9%
  • CAD +1.1%
  • AUD +2.8%
  • NZD +4.3%

Losses from the above see the dollar index record a string of four consecutive monthly gains to start the year.

This is due to a slight pullback, but also because traders considered possible two rate cuts from the Fed around mid-May. But in the meantime, the dollar has regained some ground as we return to expecting a rate cut of a little more than once for this year. Odds show that traders are currently pricing in a rate cut of around 37 basis points for 2024.

So, what can we expect during the June trading? Let’s take a look at what seasonal trends might suggest.

Seasonal trend of the US dollar index (% change)

Generally, this represents a bit of a mixed month for the dollar, but after a strong May. Of course, this is not the case this year, as the factors affecting major currencies will also be very different in 2024. Rate spreads are key and are heavily influenced by central bank outlooks and key economic data.

It can therefore be difficult to establish a link between a seasonal correlation and the movement of the dollar this month.

Monthly seasonal trend in EUR (% change)

The euro generally mirrors the dollar index in many ways. But with the ECB set to cut rates later this week, it’s one of the more interesting currencies to pay attention to. The seasonal pattern once again doesn’t suggest much in this case.

Thursday’s ECB decision and the linguistic guidance that follows will be key to setting the tone for the single currency. That said, I don’t expect much change in the latter case. Policymakers will continue to allude to data dependence and emphasize the need to wait for more data before determining what to do next.

Monthly seasonal trend in CHF (% change)

The most notable seasonal trend among dollar pairs, however, must be towards USD/CHF. Over the past 20 years, this has been the second worst month for the pair and it has fallen in 15 of the last 20 Junes.

The pair is currently near support around the 0.9000 mark, and a firm break below could trigger the next leg lower to start the new month. Further support is then visible from the key daily moving averages at 0.8923-28 currently.


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