AUD: Strength in October – ANZ

The month of October has tended to favour the AUD and NZD historically as AUD/USD and NZD/USD have risen in 12 and 10 out of the last 17 years, with an average spot gain of 0.8% and 0.6%, respectively, points out the research team at ANZ.

Key Quotes

“In contrast to NZD, AUD’s outperformance goes beyond the G10 space. AUD also tends to fare well against Asian currencies, especially against the INR and JPY, having risen in 14 and 13 out of the last 17 years, respectively. On the other hand, NZD strength in EM Asia crosses is less pronounced and consistent compared to the AUD.” 

“Based on our analysis, the best seasonal returns in October lie in going long AUD and NZD against the SEK. AUD/SEK and NZD/SEK have risen in 15 out of the last 17 years with average spot gains of 1.8% and 1.7%, respectively. One of the only two years when the crosses did not follow the seasonal pattern was during the 2008 global financial crisis.” 

“With markets slowly pricing in a tightening by the Reserve Bank of Australia, the AUD could be set to repeat its seasonal outperformance this October. Whether the NZD will follow the seasonal pattern hinges on the outcome of negotiations on forming the next government after the 23 September general election results in New Zealand.”