When Calendar Pages Predict Currency Movements

Foreign exchange markets, despite their reputation for randomness and complexity, exhibit surprisingly consistent seasonal patterns that repeat across decades of trading data. Statistical analysis using X12 ARIMA methodology examining currency behavior from January 2004 to December 2023 reveals that while seasonal influences remain modest—most major currencies deviate from trend within plus or minus 1% monthly—these recurring patterns provide traders with probabilistic edges when combined with technical and fundamental analysis.

Understanding why the Australian dollar consistently strengthens during November-February summer months, why the Japanese yen tends to appreciate before Golden Week holidays, or why the US dollar typically gains strength in the final quarter offers practical advantages for timing entries, confirming directional biases, and avoiding trades swimming against historical currents.

Seasonal trends stem from predictable economic cycles, cultural practices, fiscal reporting deadlines, and commodity export schedules that influence currency demand at specific times annually. Australian dollar strength during southern hemisphere summer months reflects increased exports of iron ore, coal, and agricultural products to China and Asia-Pacific markets restocking after Lunar New Year.
Japanese yen movements around Golden Week result from corporate fund repatriation and reduced trading volumes during extended holidays. Year-end US dollar strength connects to American companies repatriating overseas earnings for tax reporting, hedge fund portfolio rebalancing, and safe-haven flows amid December market volatility.
These patterns don't guarantee outcomes—2018 EUR/USD movements contradicted seasonal trends entirely—but provide statistical frameworks for probability-based decision-making that complements rather than replaces comprehensive market analysis.

Australian Dollar: Summer Strength and Commodity Cycles

The AUD/USD currency pair demonstrates noticeable seasonal trends during southern hemisphere summer months from December through February, often showing a rise in the Australian dollar due to increased export of raw materials such as iron ore and coal, which supports demand for AUD, with historical data indicating the currency tends to strengthen between November and February, aligning with Australia's summer and increased demand for commodities.
This seasonal pattern reflects fundamental economic realities—Australia ranks as the world's largest exporter of iron ore and coal, with China representing its primary trading partner consuming roughly 30% of Australian exports.

The timing proves critical for understanding causation. China's economy traditionally slows during January-February Lunar New Year celebrations, but manufacturers begin restocking raw materials in late November and December anticipating post-holiday production resumption. This creates surging demand for Australian commodities precisely when seasonal conditions optimize mining operations and shipping logistics. The southern hemisphere summer—November through February—offers ideal weather for open-pit mining operations in Western Australia and Queensland, while cyclone season doesn't typically intensify until late February and March, creating a window of maximum export capacity.

The AUD/USD also dips in May and June, reflecting slower economic activity in Asia-Pacific, as Chinese economic data from Q1 becomes available and often disappoints expectations, reducing commodity demand forecasts. Winter months from June through August see AUD/USD come under additional pressure from weaker economic activity in China during that period, though the relationship shows less statistical significance than summer strength. Traders should note that commodity price correlations compound seasonal effects—if iron ore or coal prices rise during November-February due to Chinese restocking, AUD benefits from both increased export volumes and higher unit prices, creating multiplicative rather than additive effects.

Recent data from 2023-2025 confirms persistence of summer strength patterns. Based on latest data from multiple years including 2023 and early 2024, AUD/USD historically tends to rise during Australian summer months from December to February due to increased commodity exports, with seasonal strength often peaking around January as demand for raw materials increases globally.

However, traders must recognize that interest rate differentials, geopolitical events, and sudden shifts in Chinese economic policy can override seasonal tendencies. The Reserve Bank of Australia's monetary policy decisions, particularly those affecting the interest rate differential with the Federal Reserve, often prove more influential than seasonal factors during periods of macroeconomic stress or policy divergence.

Japanese Yen: Golden Week and Year-End Repatriation

Seasonal analysis brings forth interesting phenomena in USD/JPY, with the Japanese yen tending to weaken in summer months, particularly July and August, due to lower trade activity and holidays in Japan, while conversely the yen sometimes strengthens at year-end as companies repatriate funds.

The Golden Week phenomenon—Japan's extended holiday period from late April through early May including Showa Day (April 29), Constitution Memorial Day (May 3), Greenery Day (May 4), and Children's Day (May 5)—creates unique market dynamics affecting yen positioning and liquidity.

Golden Week in 2025 ran from April 29 to May 6, becoming one of the busiest travel seasons alongside New Year and Obon festivals. Japanese corporations traditionally close operations during this period, with many employees taking extended vacations. Historical patterns suggest two competing forces affect the yen around Golden Week.

First, Japanese travelers converting yen to foreign currencies for international vacations creates selling pressure—survey data from 2025 indicated total spending on outbound trips reached 147.4 billion yen with popular destinations including South Korea, Taiwan, Southeast Asia, Hawaii, and Europe. This conversion temporarily weakens the yen as demand shifts to destination currencies.

However, the weeks preceding Golden Week often see the opposite effect—Japanese companies repatriate foreign earnings to meet fiscal reporting requirements for Japan's fiscal year ending March 31, converting foreign currency profits back to yen. This repatriation creates buying pressure strengthening the yen in late March through mid-April, potentially offsetting Golden Week travel-related weakness. The net effect varies annually depending on relative magnitudes of corporate repatriation versus consumer travel spending, making Golden Week's yen impact less consistent than Australia's summer commodity cycle.

Year-end dynamics provide more reliable seasonal patterns. Japanese corporations operating on fiscal years ending December 31 repatriate foreign earnings in November-December for financial reporting, creating yen buying pressure that typically strengthens USD/JPY resistance and can reverse trends.
Combined with reduced trading volumes during December holidays creating lower liquidity and sharper price movements, the yen often demonstrates relative strength against major currencies during this period. The yen strengthened from 157 to 148 against the USD in 2025, partly due to BOJ rate hikes and suspected interventions in April and July 2024, though attributing this entirely to seasonal factors oversimplifies the complex interplay of monetary policy, intervention, and market positioning.

US Dollar: Fourth Quarter Strength and May Resilience

Historical data on the USD index shows that it has mostly gained in the month of May, rising nine times out of ten in the ten years to the end of 2016, with expanding sample size to thirty years between 1987 and 2016 showing a regression test suggesting this remains the case with almost 90% confidence level.
This May strength phenomenon, while statistically significant, lacks obvious fundamental explanation compared to commodity-driven seasonal patterns, potentially reflecting technical factors or self-fulfilling prophecies as traders position for historically strong periods.

The fourth quarter presents more compelling fundamental justification for US dollar seasonal strength.
Historically, the US dollar tends to strengthen in the final quarter of the year, particularly around November and December, attributed to US companies repatriating overseas earnings toward year-end creating dollar demand, hedge funds and institutions rebalancing portfolios favoring the greenback as a safe haven, and seasonal weakness in risk assets like equities boosting demand for the dollar.

American corporations with substantial foreign operations face fiscal year-end December 31 deadlines requiring conversion of overseas profits to dollars for consolidated financial statements, creating predictable demand spikes.
Portfolio rebalancing effects compound repatriation flows. 

History has shown this is especially so against currencies such as the Aussie (AUD) or Kiwi (NZD), which are commodity-backed currencies more tied to global supply and demand of their local commodities. The inverse relationship between US dollar strength and commodity currency weakness during Q4 reflects not only direct exchange rate effects but also broader risk sentiment shifts. When global growth concerns intensify approaching year-end—whether justified by actual economic data or simply uncertainty about the coming year—investors reduce exposure to growth-sensitive commodity currencies while increasing allocations to defensive assets including US Treasuries and dollars.
This dynamic proved particularly pronounced during 2023-2024 as markets navigated Federal Reserve tightening cycles, inflation uncertainties, and geopolitical tensions.

EUR/USD: Q1 Bullishness and Summer Doldrums

The EUR/USD, one of the most traded pairs worldwide, typically shows a tendency to rise in the first quarter of the year, possibly linked to stronger economic data releases from Europe after the start of the new year and US budget cycles. This Q1 strength pattern, while less consistent than some commodity currency seasonals, appears connected to European fiscal calendars and economic reporting schedules. Many Eurozone countries release preliminary annual GDP figures, employment data, and fiscal performance reviews in January-February, providing clarity about economic conditions after holiday-season data gaps.

The European Central Bank's traditional summer pause—avoiding major policy announcements or rate changes during July-August unless exceptional circumstances demand action—removes a key source of volatility and directional momentum. Combined with reduced trading volumes creating wider spreads and increased slippage risk, summer months typically offer suboptimal risk-reward profiles for EUR/USD traders. The pattern doesn't suggest blindly shorting euros every June, but rather exercising caution with EUR/USD positions during these periods and demanding stronger technical or fundamental confirmation before initiating trades against the seasonal headwind of summer weakness.

GBP/USD: Year-End Volatility and Brexit Seasonality

The GBP/USD currency pair, also known as "cable", exhibits distinct patterns at the end of the calendar year and in spring, with November and December seeing an increase in volatility and trading volumes due to companies preparing for end of financial year and Christmas holidays, while winter months from December to February often see the pound strengthening against the euro due to New Year sales and increased consumer spending in the UK.
This year-end volatility reflects multiple converging factors—UK fiscal year-end March 31 differs from calendar year-end December 31, creating overlapping reporting periods for different entities and sectors.

British retailers experience critical performance periods during November-December Christmas shopping season, with "Black Friday" sales (imported from US traditions) and Boxing Day sales creating concentrated consumer spending. Strong retail performance during this window historically correlates with pound strength as positive economic data and consumer confidence metrics support bullish GBP positioning. Conversely, disappointing holiday retail figures can trigger sharp pound weakness as traders reassess UK economic health and Bank of England policy implications.

The distinction between true seasonality driven by weather, agricultural cycles, or cultural practices versus "calendar seasonality" driven by scheduled policy events matters for trading strategy.

True seasonality tends to persist across decades with modest annual variation, while calendar seasonality proves more vulnerable to disruption if schedules change or policy approaches shift.
Traders should therefore treat GBP September-October volatility as event-driven rather than purely seasonal, requiring fundamental analysis of specific policy announcements rather than mechanical positioning based solely on historical month-by-month patterns.

Commodity Currency Patterns: CAD and NZD Cycles

The USD/CAD pair is subject to seasonal changes in oil prices, as Canada is a major oil exporter, with the Canadian dollar often strengthening against the US dollar during spring from March to May due to the start of construction season in Canada and increased demand for oil, while autumn from September to November often shows volatility due to changes in oil prices and companies preparing for end of financial year.
This Canadian dollar seasonality reflects North American construction and manufacturing cycles where spring marks project resumption after winter shutdowns and autumn represents completion deadlines before winter weather halts outdoor work.
February through April has traditionally been strong months for WTI crude, with prices rising in 90% of February cases over the past ten years, whether due to anticipation of summer driving season in the US or switchover to summer-blend fuels, having clear impact upon the oil exporting country's currency against the US dollar, though despite strong correlation in past ten years, regression tests find little significance.
This statistical caveat proves crucial—correlation without causation or statistical significance suggests the pattern may represent coincidence or data mining rather than exploitable trading edge. Canadian dollar traders should therefore use spring oil strength as confirming factor rather than primary trade rationale.

Statistical Significance and Trading Application

Long-term historical analysis continues to suggest that seasonal influences on currencies are generally modest, particularly once adjustments are made to account for outlying observations, with on average almost all of 36 major currencies covered deviating from trend within narrow range of plus or minus 1%.
This statistical reality demands perspective—seasonal patterns provide subtle probability tilts, not dominant forces overwhelming fundamental and technical factors. A 1% average seasonal deviation means that even when seasonal trends align perfectly, currency movements remain small relative to volatility generated by central bank decisions, geopolitical events, or major economic data surprises.

The practical application involves using seasonal analysis as tie-breaker or confidence booster rather than standalone trading system. Seasonality should not be the basis of any trading strategy and one would never make a "seasonal" forecast, however there is evidence that end of calendar year has tendency to produce directional movement while summer months tend towards absence of such movement. This guidance proves essential—seasonal patterns work best when confirming technical setups or fundamental biases rather than contradicting them.

A systematic approach combines seasonal awareness with comprehensive analysis. 

Common Pitfalls and Risk Management Considerations

Following the trend in 2018 would result in losses both at beginning and end of year as EUR/USD rose during first three months and fell during last four, in complete opposition to seasonal trend, though next two years were much more favorable to traders following seasonal trends with the currency pair falling in January-March period and rising in September-December period in both 2019 and 2020.

This example illustrates the primary danger—blind adherence to seasonal patterns without confirming fundamental or technical signals. EUR/USD traders mechanically buying every January 2018 expecting seasonal Q1 strength suffered losses as the pair declined, demonstrating that seasonality represents probability, not certainty.
Interest rate differentials frequently override seasonal tendencies.

Conclusion: Seasonal Patterns as Probability Enhancers, Not Guarantees

Forex seasonal trends provide valuable context for timing and position sizing decisions when integrated thoughtfully with technical and fundamental analysis. 
The most sophisticated approach treats seasonal patterns as probability tilts informing discretionary decisions. 
Combining this empirical rigor with diversified analysis—technical, fundamental, sentiment, and seasonal—positions traders to capitalize on recurring patterns while maintaining flexibility when exceptional circumstances demand deviation from historical norms.

Written by Ethan Blake
Independent researcher, fintech consultant, and market analyst.

November 21, 2025

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