SEASONAL TRENDS ARE JUST ABOUT TO TURN LESS FAVOURABLE FOR THE USD

Economists at Scotiabank expect the US Dollar Index to sustain losses in April, which could extend into the third quarter. 

April is the worst month of the year for the DXY over the last 20 years

“The DXY could drop a little more and broader USD losses to extend to 2-3% more (and perhaps as much as 5%) from current levels in the next few months. Those losses may be concentrated in Q2-Q3 before a year-end rebound if seasonal patterns are any guide.”

“Seasonal trends are just about to turn less favourable for the USD. Over the last 20 years, the DXY has weakened 70% of the time through April, kicking off a soft run in the USD’s broader performance that typically extends into Q3. The DXY has weakened an average of -1% through April since 2002.”