The USD is being bought at the moment on rising US rates on expectations that the Fed is going to be hiking interest rates. The sharp rise higher in yields across the world on inflation fears is also boosting the USD. Why? Because if we are heading into a stagflationary environment where growth is slow, but inflation is high then the USD will gain strongly in those conditions. So, could this be a great time to buy the USD? The seasonals say ‘yes’.

Over the last 10 years, the US dollar index has risen 90% of the time between October 17 and November 17 with an average return of +1.61%. The largest gain was in 2015 with a 4.95% rise. The largest loss was in 2020 where it registered a -1.37% loss.

Major Trade Risks: Any slow down in inflation could see a reflationary environment where the rest of the world recovers quickly. That is a USD negative environment.