Another really notable trend around this time of the year is USD weakness.
This is due to some taxation reasons that regularly sees USD flows out of parent US companies into daughter companies around year end. So, the USD does tend to be very weak heading into year end.
Over the last 25 years the dollar index has fallen 20 times between Dec 21 and Dec 31. The largest fall has been -2.46% in 2000. The percentage of winning sell trades has been 80%. Will the USD show weakness again this year?
Major Trade Risks:
The main risk to this seasonal pattern would be on strong risk off trading that also results in USD strength or any expectations that the Fed will need to keep hiking rates aggressively to combat US inflation
Don’t just trade it, but Seasonax it!