After the Omicron variant fears broke around US Thanksgiving time there was a strong sell-off in the commodity-based currencies including the NZD. The RBNZ though is looking at hiking interest rates to 2.6% in 2023 from the current level of 0.75%. Therefore, the NZD could easily be due some upside. Is the strong seasonal pattern around year-end a catalyst for gains on USD weakness?

Over the last 15 years, the NZDUSD pair has gained over 80% of the time. From December 27 – December 31 the NZDUSD has risen 13 times over the last 15 years. The largest gain was nearly 3.92% in 2010 and last years gain was over 1%. Will we see NZDUSD gain 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.

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