Monthly Forex Seasonality - June 2021: Best Month of Year for AUD, CAD, & NZD
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June FX Seasonality Overview:
If “sell in May and go away” was nonsense, it’s because risk appetite has remained strong through the end of June. The US S&P 500 is in positive territory in June over the past 5-year and 10-year averages.
The trio of commodity currencies are embarking on their best month of the year. Historically speaking, the Australian, Canadian, and New Zealand Dollars have had their best month of the year during June.
May was supposed to be the best month of the year for the US Dollar. Failure to liftoff with seasonal tailwinds may foreshadow a rough month of June, which is otherwise one of the worst months of the year for the greenback.
British Pound Technical Analysis: GBP/AUD, GBP/CAD, GBP/NZD Rates Outlook
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GBP/AUD rates, on the other hand, have recently been rejected from a multi-decade trendline.
Longer-term Influences Take Shape in GBP-crosses
With May in the rearview mirror, it’s a good time to take stock of the British Pound’s performance against some of the more volatile major currencies, which were plagued by – you guessed it – volatile if not weaker commodity prices over the course of the month. While currencies linked to energy may be the exception to the rule, those with strong economic connections to agriculture and base metals faced tougher sledding (particularly the latter).
Central Bank Watch: BOE & ECB Interest Rate Expectations Update
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Central Bank Watch Overview:
The BOE and the ECB are meeting later this month, but focus is on what they’ll do later this year and beyond.
The BOE is further along the path of normalization, while the ECB is still toying with ideas about how it may further enhance its stimulus measures in context of rising inflation pressures.
Inflation Making Central Bankers Uneasy
In this edition of Central Bank Watch, we’ll cover the two major central banks in Europe: the Bank of England and the European Central Bank. Neither of Europe’s most significant central banks won’t meet again until later this month, allowing for the EUR- and GBP-crosses to toy with speculation over forthcoming policy moves. And while one of the central banks has begun to throttle back its QE program, the other is grappling with its desire to provide additional stimulus against the backdrop of rising inflationary pressures.