The depreciation of the US dollar has been substantial. We have entered the last month of 2023 and in November we had a sharp drop in the dollar of 3.0%. MUFG Bank economists point out that there is a fairly compelling seasonal bias for EUR/USD in December.
Quite convincing seasonal bias for EUR/USD in December
There is a seasonal bias that is quite compelling for EUR/USD in December – 14 Decembers of the last 20 years have seen EUR/USD higher with the average gain on those 14 occasions being an impressive 2.6%. If we exclude December 2008 (+10.1%), the average gain on the other 13 occasions is still substantial at 2.0%. Furthermore, on 8 of the 11 occasions in which EUR/USD rose in November, it was followed by a rise in December.
But this doesn’t mean we can ignore the fundamentals, and certainly the prospects for that seasonal bias being evident in December 2023 would be helped if we started to see a slowdown in US economic activity. Without that, investor optimism about recent declines in inflation may not persist.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
