"Dollar Storm" in September

The September that dollar bulls are looking forward to is just around the corner.The dollar has strengthened in September for six consecutive years。

Since 2017, the Bloomberg Dollar Index has not only risen in September every year, but also gained an average of 1.2% that month, outperforming any other month during the same period。Strategists say,Reasons include late-quarter buying and a general increase in safe-haven demand before October。October is the month with the most frequent stock market declines。

"September tends to be positive for the dollar, usually explained by a rise in risk aversion, which boosts demand for high-yielding, safe-haven G10 FX," said Valentin Marinov, head of G10 FX research and strategy at Credit Agricole CIB in London。"Seasonal analysis of risk aversion indicators such as the VIX seems to confirm this conclusion," he said。

otherIndustrial foreign exchangeStrategists say there are a number of fundamental factors for 2023 that could also support the dollar next month.For example, the relatively hawkish stance of the Federal Reserve and the rise in US Treasury yields。

"Given the strength of economic growth and economic performance, the dollar is likely to continue to perform strongly in the short term," said Rodrigo Catril, a currency strategist at National Australia Bank in Sydney。"At least in the short term, everything seems to be in favour of a stronger dollar from now on."。”

Options trading further proves that,Markets are bracing for a rise in the dollar in September。Risk reversals based on the Bloomberg Dollar Index (contracts that hedge against a stronger or weaker dollar) show that contracts that hedge against a rising dollar trade at a premium to contracts that hedge against a falling dollar。