End-of-Year Bias in EUR/USD
December 15, 2009
In six of the past seven years, EUR/USD declined on net between mid-December and yearend, and the dollar dropped in this seasonal interval in eight of ten second-half Decembers since the euro was created. The average change in the dollar for that period was minus 1.3% during those ten years. An even stronger bias of dollar weakness against the German mark was exhibited in the early years of floating dollar rates. Beginning with 1974 and running through 1987, the dollar fell over the second half of December 13 out of 14 times and posted an average drop of 1.7%. From 1988 to 1998, in contrast, no end-year seasonal bias was observed. The table below documents dollar changes against Europe’s dominant currency in late December since fixed dollar parities gave way to floating exchange rates in 1973. EUR signifies dollars per euro, and DEM stands for D-marks per dollar.
| Year | Mid-Dec | End-Dec | USD Chg | |
| EUR | 2008 | 1.3692 | 1.3973 | -2.0% |
| 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% |
Copyright Larry Greenberg 2009. All rights reserved. No secondary distribution without express permission.
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