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Beginning of the month, but it feels like we have been talking seasonal factors for some weeks already.

On July 13, we noted DEUTSCHE BANK initiated a short NZD/JPY, targeting 66.50, remarking Aug is historically, the poorest month for risk in the macro space and the Antipodeans tend to come under the greatest pressure.

In opening moves, we can see that one of the traditional havens the USD is winning out across the board so far, from the tiniest of gains vs JPY through to +0.6% against AUD, NOK and CHF.


IGM FX and Rates 


It's easy to assume August will be quiet given summer holidays impaired trade in the Northern Hemisphere, but that of course can bring thinner trade, which in turn can exacerbate moves and direction.

So, what is the reality? How does the Dollar tend to perform during the month and are there any G10s that seem to perform particularly well/badly through August?

  • In Aug 2019, the USD lost out to the other two main havens, -0.4% CHF and -2.4% YEN. Elsewhere, the USD was a winner, from tiny against GBP through to +1.8% SEK, +2.9% NOK and +3.5% NZD.
  • In 2018, similarly, USD losses again vs -0.8% YEN and -2.2% CHF. Everywhere else in G10 land, the USD was a winner, most acutely +2.9% NZD, +3.2% AUD and +4.0% SEK.
  • In 2017, the USD was a mixed performer, down -0.3% JPY through to -1.3% NOK and -1.6% SEK, with decent size USD gains vs the -2.2% still Brexit vote weighed GBP and -4.5% NZD.
  • In 2016, mixed again. USD losses vs both -0.7% NZD and -1.4% NOK, with gains of +0.1% EUR through to +1.0% AUD, +1.3% JPY, +1.5% CHF.
  • In 2015, another mixed bag. USD losses of -1.8% SEK, -2.1% EUR and -2.2% JPY. Decent USD gains seen vs +1.8% GBP, +2.7% AUD and +3.8% NZD.
  • In 2014,material USD losses against -1.4% NOK. USD up elsewhere from +1.0% CHF through to+1.6% NZD, +1.7% GBP and +1.9% EUR.
  • 2013 brought mostly USD gains. Down only vs the -2.0% GBP and up elsewhere from +0.3% JPY through to +1.6% SEK and strong gains vs the commodity bloc, ie +2.5% CAD and +3.2% NZD and +3.7% NOK.
  • In 2012, we saw mostly USD losses in Aug, from -1.2% GBP through to -2.2% EUR, -2.3% CHF, -2.6% SEK and -4.1% NOK. Biggest USD gains vs the +0.7% NZD and +1.7% AUD.
  • In 2011, the USD was a tiny loser vs JPY and NOK and made reasonable gains vs +1.1% SEK and GBP, +2.3% CAD, +2.5% CHF and AUD and best of all +2.9% NZD.

IGM FX and Rates


  • Ten years ago was the safe haven month, with USD/JPY near 85.00 (!) amid rises in spreads of sovereign CDS in some EU countries rekindling fears on debt problems. The USD lost out vs the -2.6% CHF and -2.7% JPY and made decent gains everywhere else, from +1.5% AUD, through to +2.9% EUR and those easy losers +3.4% CAD, +3.6% NOK and +3.7% NZD.
  • In 2009, it was almost the reverse. Largely USD losses, from -0.5% EUR to -1.7% for both NOK and JPY and biggest loser was vs -3.5% NZD. Only gains were vs +1.5% CAD, +2.5% GBP.

IGM FX and Rates 


  • In Aug 2008, the USD swept the board in a big way, up from +0.8% JPY, +4.6% NZD, +5.3% NOK, +6.0% EUR, +6.2% SEK, +8.2% GBP and +9.0% AUD, as US GDP data (Q2 +2.1% then the recession!) showed stimulus supported the US economy through a difficult period (Paulson).
  • In 2007, the USD mainly lost out against the -1.0% CAD and -2.5% JPY, with significant gains made vs the +2.4% SEK, +3.9% AUD and +8.0% NZD. Again!
  • 2006 was mixed. Material USD losses against -2.0% GBP, -2.5% CAD and -6.1% NZD. Most acute USD gains +2.3% YEN and +2.6% NOK.


IGM FX and Rates


  • For good measure, 2005 brought mostly USD losses, largest against -2.9% CHF and -3.0% GBP. Sole USD gains +0.2% AUD.

No wonder DEUTSCHE targeted NZD/JPY recently.

IGM FX and Rates


The Kiwi can be a real loser and over the last 15 years NZD/USD has made an average loss of -1.8% in Augusts’.

So, one last try. We look to sell at 0.6660 for a return towards its 200-dma (0.6359) at 0.6375, with havens over risk this month. Stop 0.6745.

Technical Analysis : Nzd/Usd

IGM FX and Rates


  • Pullback from Fri's .6716 high has dampened short-term momentum
  • However, wider momentum remains strong, underpinned by Jul's bullish 50/200-DMA crossover
  • Dips should attract fresh bids ahead of/near the 14 Jul .6503 prior reaction low
  • Above .6716 opens .6756/60 (Dec'19 peak/61.8% of 2017-20 fall)

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