End-of-Year Bias in EUR/USD
December 15, 2008
The dollar declined between mid-December and yearend against the euro in five of the last six years, including a 1.2% drop over that period in 2007. Over those six years, the dollar posted an average drop of 1.1% in the final half of December. A seasonal drop against the mark between mid-December and end-month occurred in 13 of the 14 years to 1987 but in just 7 of the ensuing 14 years. For the entire floating-dollar era since 1973, the dollar fell against the D-mark and then the euro in 25 of 35 years in this period and recorded an average drop of 1.0%, a maximum decline of 5.0% (in 2000), and five decreases in the second half of December of 3.0% or greater. Early January tends to exhibit a counter-acting upward dollar bias.
The table below documents the dollar’s changes against Europe’s dominant currency in late December since flexible exchange rates replaced fixed dollar parities. EUR signifies dollars per euro, and DEM signifies D-marks per dollar.
| Year | Mid-Dec | End-Dec | USD Chg | |
| EUR | 2007 | 1.4427 | 1.4602 | -1.2% |
| EUR | 2006 | 1.3086 | 1.3189 | -0.8% |
| EUR | 2005 | 1.1968 | 1.1840 | +1.1% |
| EUR | 2004 | 1.3395 | 1.3575 | -1.3% |
| EUR | 2003 | 1.2295 | 1.2580 | -2.3% |
| EUR | 2002 | 1.0234 | 1.0494 | -2.4% |
| EUR | 2001 | 0.9030 | 0.8905 | +1.4% |
| EUR | 2000 | 0.8948 | 0.9419 | -5.0% |
| EUR | 1999 | 1.0066 | 1.0090 | -0.2% |
| DEM | 1998 | 1.6621 | 1.6690 | +0.4% |
| DEM | 1997 | 1.7729 | 1.7995 | +1.5% |
| DEM | 1996 | 1.5555 | 1.5405 | -1.0% |
| DEM | 1995 | 1.4435 | 1.4334 | -0.7% |
| DEM | 1994 | 1.5712 | 1.5485 | -1.4% |
| DEM | 1993 | 1.7175 | 1.7360 | +1.1% |
| DEM | 1992 | 1.5710 | 1.6155 | +2.8% |
| DEM | 1991 | 1.5905 | 1.5210 | -4.4% |
| DEM | 1990 | 1.4840 | 1.4965 | +0.8% |
| DEM | 1989 | 1.7355 | 1.6915 | -2.5% |
| DEM | 1988 | 1.7365 | 1.7730 | +2.1% |
| DEM | 1987 | 1.6270 | 1.5760 | -3.1% |
| DEM | 1986 | 2.0150 | 1.9370 | -3.9% |
| DEM | 1985 | 2.5165 | 2.4520 | -2.6% |
| DEM | 1984 | 3.0890 | 3.1560 | +2.2% |
| DEM | 1983 | 2.7580 | 2.7265 | –1.0% |
| DEM | 1982 | 2.4453 | 2.3830 | -2.5% |
| DEM | 1981 | 2.3000 | 2.2540 | –2.0% |
| DEM | 1980 | 1.9680 | 1.9620 | -0.3% |
| DEM | 1979 | 1.7406 | 1.7280 | -0.7% |
| DEM | 1978 | 1.8950 | 1.8220 | -3.9% |
| DEM | 1977 | 2.1570 | 2.1110 | -2.1% |
| DEM | 1976 | 2.3958 | 2.3580 | -1.6% |
| DEM | 1975 | 2.6368 | 2.6230 | -0.5% |
| DEM | 1974 | 2.4605 | 2.4110 | -2.0% |
| DEM | 1973 | 1.6530 | 2.7025 | +1.9% |
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