Movements of EUR/USD Around Yearend 2023
January 15, 2024
Movements in the dollar in late December and early January have traced a pattern that has been repeated many times. This tendency pertains to the dollar’s value against Europe’s most influential currency, which was the Deutsche mark from when the dollar first floated in 1973 through 1998 and thereafter has been in the relationship against the euro. This web site has explored this seasonal phenomenon, most recently in an update that was posted on December 17, 2023. In that entry, it was observed that the dollar had fallen against the German currency during the second half of December in 13 of 14 consecutive years from 1974 through and including 1987 and that the average size of those declines had been 1.3%. Note was further made that “the dollar has depreciated versus the euro between mid- and end-December in each of the past seven years, dropping 1.1% in 2016, 2.1% in 2017, 1.2% in 2018, 0.7% in 2019, 0.5% in 2020, 0.8% in 2021, and 0.6% in 2022.”
A reversing directional tendency had initially been prominent during the first half of January in which dollar/mark climbed in ten of the 14 years to 1988 by 0.9% on average. However, that bias had faded recently. The dollar has fallen between end-year and January 15th by 0.4% in 2015, 1.1% in 2016, 2.1% in 2017, 0.6% in 2022, and 1.0% in 2023, while rising 0.3% in 2018, 0.6% in 2019 and 1.1% in 2021.
For the record, movements of the dollar against the euro over the past month conformed to the original pattern in the 1970’s and 1980’s. Between mid-December and the end of 2023, the dollar dropped 1.3% against the euro, but from the end of last year to today’s close, the U.S. currency rebounded by 0.8%. At $1.0949 per euro currently, the dollar is 0.5% weaker than its December 15 closing level of $1.0894.
Copyright 2024, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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