EUR/USD: December is Euro’s best month by some distance

The average monthly performance of the Euro against the Dollar for the last 20 years shows that the EUR/USD pair has usually risen in December, economists at Société Générale report.

Danger of falling over on an icy sidewalk in January

“The last 20 Decembers have seen EUR/USD rising on 16 occasions, making it the Euro’s best month by some distance. Part of the reason may be that Euro sentiment has been negative more often than not, over that period. The average position in the FX markets market, for example, has been short Euros over that period. This means that there is frequently pressure to cover short Euro positions into the end of the year.”

“January is usually the Euro’s worst month, perhaps because the bearish sentiment doesn’t go away. This year, with a massive Dollar-bullish consensus taking EUR/USD lower, short-covering pressures may be even bigger than usual.”

“The danger is that the conditions for a January EUR/USD wobble are very easy to imagine. US consumers, still supported by strong balance sheets, don’t stop spending, and the Fed is forced to remain hawkish in the New Year. Winter arrives in Europe and concerns about energy supplies grow. Russian missile attacks on Ukraine raise fears of a bloody stalemate. That kind of news after a strong Euro rebound is exactly the kind of icy sidewalk that even a careful currency strategist could fall over on!”

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.