FX Viewpoint – Usd Seasonality in November?

So far this month, the USD is very close to being a loser across the board. Heaviest losses so far come against the -0.7% NZD and then -1.2% NOK, CAD and AUD!! The latter's moves come even after an earlier RBA rate cut and QE implementation. Only USD gains so far are minute, at +0.05% YEN.
This is no normal Nov, that's for sure, given the US election today and the ongoing devastation of COVID.

Q4 can be pro-USD, but what of Nov generally? It is still worth looking to spot a trend. Is it a strong DOLLAR month and/or are there any G10s that tend to perform particularly well/badly?

• Last year, the USD lost out only against the -0.1% NZD and -0.8% SEK. Everywhere else, it was USD wins and in particular +1.2% EUR, +1.3% YEN, +1.4% CHF and +1.9% AUD.
• 2018 was more mixed. Heaviest USD downside came against -1.1% CHF, -3.3% AUD and -5.5% NZD. Largest USD gains came against +1.0% CAD and +2.1% NOK.
• In 2017, it was again a fairly mixed bag. USD lost out to among others -1.4% CHF, -1.8% GBP and -2.2% EUR. Notable USD gains were seen vs +1.2% AUD and +1.8% NOK.
• In 2016, the USD only lost out to the -2.2% GBP. Everywhere else, there were largely strong USD gains, incl +2.2% SEK, approx +3.0% CHF, AUD and NOK and +3.6% EUR and a mega +8.4% JPY.

• In 2015, a similar story. Only USD losses against one AUD at -1.3%. USD gains everywhere else, from +2.0% JPY through to +2.1% CAD, +2.4% GBP and NOK, +2.9% NZD and +4.0% CHF and EUR.
• It's becoming a trend. In 2014, just USD losses vs this time NZD at -0.7%. USD gains elsewhere, incl +1.3% CAD, +2.2% GBP, +3.3% AUD, 4.0% NOK and +5.3% JPY.
• In 2013, the USD only lost out materially to the -2.0% GBP. There were decent size USD gains vs the likes of +1.7% NZD and CAD, +3.0% NOK, +3.7% AUD and +4.0% JPY.
• In 2012, mixed and mostly little direction. USD losses confined between -0.2% to -0.5% vs the likes of AUD,CAD and NOK. USD gains included vs +0.7% GBP and +3.3% JPY.
• In 2011, just light losses vs -0.7% JPY. Everywhere else, USD gains, ie +2.4% AUD and GBP, +3.0% EUR, +3.3% NZD, +3.8% NOK and SEK and +4.0% CHF.
  
  
  

• In 2010, USD gains across the board, from +0.7% CAD, through to +3.9% JPY, +5.1% SEK, +5.8% NOK and +6.9% EUR.
• 2009 was not a good year for the DOLLAR. Down from -0.8% NOK, -1.9% EUR, -2.1% CHF, -2.7% CAD and -4.3% JPY. Tiniest of USD gains vs +0.1% GBP and +0.3% NZD.
• In 2008, just -3.0% JPY losses and gains everywhere else. The Usd was up vs the likes of +2.2% CAD, +4.1% SEK and NOK, +4.4% GBP, +4.6% CHF and +5.8% NZD.
• In 2007, a mixed bag of -1.0% EUR, -2.3% CHF and -3.8% JPY. USD wins included vs +1.2% NZD, +3.2% NOK, +5.3% AUD and +5.6% CAD.
• In 2006, the USD was largely a loser, from -1.0% YEN, near -4.0% EUR and CHF, -5.5% SEK and -6.2% NOK. Only USD win against +1.6% CAD.
• In 2005, almost the opposite. Sold USD loss vs -1.0% CAD. USD wins included +2.5% GBP, +2.7% CHF, +3.5% YEN and +3.8% NOK.

• In 2004, USD losses across the board and material ones, from -2.6% CAD through to -4.4% NZD, -4.6% CHF and -5.2% SEK.
• 2003, same again. the USD lost out across the board. This time, biggest losses came against -3.8% CHF and SEK, -4.2% NOK and -4.3% NZD.
• In 2002, reduced direction. Biggest USD losses of -1.5% NOK and -2.5% NZD. Biggest USD gains +0.4% CHF and CAD and +0.5% GBP.
• Another mixed bag in 2001. Largest USD downside -1.0% CAD, -1.5% NZD and -3.7% AUD. Most acute USD wins +0.9% YEN and +2.1% GBP.
• For good measure, twenty years ago, yet another mixed bag. Material USD losses of -1.8% AUD, -2.8% EUR, -4.0% CHF and -4.6% NZD. Notable USD wins of +1.4% YEN and +1.6% GBP.
  
  

Overall, the USD tends to do fairly well in Novs and vs much of the G10. It has been a consistent strong winner vs JPY for much of the last decade in particular.

Over the last 20 years, USD/JPY has gained on ave +1.0% and Nov has traditionally been its strongest month during the period.

Recall we wrote in the RISK section of our neutral YEN WEEK Mon on the US election. Yen a haven vs risk FX. Any delays, contested outcome, ie anything other than the positioned for blue wave, should at least provide a big boost to Yen/Crosses. We suspect anything uncontested, ie Biden win or Trump surprise aka 2016, should be USD/JPY supportive.

Given likely volatility as results are revealed, we think any trade would be left vulnerable, but we would be tempted to buy the dip after the initial flurry of spikes.