USD Weakness in December
Historical Patterns
– December has been a soft month for the Dollar.
– In the past 25 years, the USD lost ground in ~70% of Decembers.
– The USD performed especially poorly against CHF, while holding up better against JPY and CAD.
Current Fundamentals
– Year-end USD weakness typically stems from:
– Hedging and profit repatriation by foreign investors in USD assets.
– Exporters converting USD-denominated revenues back into home currencies.
