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ASIA FX: Seasonality Less Positive For Asian Currencies As We Progress Into Feb

ASIA FX
BulletEM BulletAPACEmerging Market News

January to date has seen Asian currencies outperform relative to historical seasonality. The chart below plots average Asia Dollar performance (ASIADOLR index on BBG) by calendar month (last 10 years as a sample period). On average the Asian currency index has risen close to 0.40% against the dollar. In January 2025 to date we are up around 0.90%. Lack of fresh tariff action from the returning Trump administration has certainly been a positive. 

  • Historically, positive January Asia FX seasonality is likely to reflect a number of factors: whether it be repatriation of earnings by China corporates ahead of LNY, or fresh capital being put to work in bond and equity markets (a factor that has aided Indonesia in the past), or positive Thailand tourism flows etc.
  • As we progress into February though, seasonality has, historically, been less positive. On average the Asia dollar index loses close to 0.60%. After May, it is the second worst month of the year from a seasonality standpoint. No doubt some of the positives typically associated with January related FX flows, slow as we progress into February. 

Fig 1: Asia Dollar Seasonality Typically A Headwind in Feb (last 10yrs Average Monthly Performance) 

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January to date has seen Asian currencies outperform relative to historical seasonality. The chart below plots average Asia Dollar performance (ASIADOLR index on BBG) by calendar month (last 10 years as a sample period). On average the Asian currency index has risen close to 0.40% against the dollar. In January 2025 to date we are up around 0.90%. Lack of fresh tariff action from the returning Trump administration has certainly been a positive. 

  • Historically, positive January Asia FX seasonality is likely to reflect a number of factors: whether it be repatriation of earnings by China corporates ahead of LNY, or fresh capital being put to work in bond and equity markets (a factor that has aided Indonesia in the past), or positive Thailand tourism flows etc.
  • As we progress into February though, seasonality has, historically, been less positive. On average the Asia dollar index loses close to 0.60%. After May, it is the second worst month of the year from a seasonality standpoint. No doubt some of the positives typically associated with January related FX flows, slow as we progress into February. 

Fig 1: Asia Dollar Seasonality Typically A Headwind in Feb (last 10yrs Average Monthly Performance) 

Keep reading...Show less