AUD,NZD/Trade Ideas

Useful AUD facts (or not so useful!): AUD/USD headed for 1.07 in January!

Many thanks to the mine of information, David Scutt at Arab Bank, for some useful A$ facts to open proceedings for 2013:

  • The AUD has risen 43% of the time in January since it floated in 1983, for an average monthly gain of 3.17%:
  • When it’s fallen in January, the average loss has been 2.24%:
  • Australian stocks have enjoyed a positive January on 71.4% of times following on from a Santa rally:
  • Over the last 20 January’s, stocks have risen on 12 occasions by an average of 2.56%:
  • Side-note; the market is still pricing in a 63% chance of a rate cut next month.

Statistics would therefore suggest that we get a risk-on move this month and we may see the AUD/USD rise by over 3% which would take us close to 1.0700.

  1. Hi Sean

    Happy New Year. I watch your posts with interest!

    But, wouldn’t it be correct to say the AUD has fallen 57% of the time in January? (Unlikely to have been exactly flat).

    So wouldn’t statistics therefore suggest that we get a risk-OFF move this month and that we may see the AUD/USD FALL by over 2% which would take us under 1.0200?

    Not that I trade….just interested.

  2. Hi Peter. My logic (if an ex-cable trader can have such a thing) is that after stocks rose in December, there’s a >70% chance of more gains in Jan which implies risk on. Therefore we will have one of the “43%” Jans where the AUD rises by around 3% on average. Lies, damned lies, and statistics 🙂

  3. That makes sense (if anything can in forex lately). Thanks for the clarification. Watching the moves over the last couple of years I have found my self wondering if a coin toss would give a better outcome! To me its a bit like footy tipping… 😉

  4. Certainly been hard to pick Peter, I’ve seldom seen such prolonged periods of range trading but perhaps this latest Yen move might be about to stir things up??

  5. ‘pricing in 63% chance of a rate cut’

    I admit to wondering at length about the formula used to derive such a definite and rather precise number–I see this type of a statistic fairly often.

    Almost regardless of its accuracy, it would be nice to know exactly what is being measured, from when to when, and how, to come up with the figure…

    PS I’m happy to find your site here!

  6. Hi Kyle, good to hear from you. The site is still fairly basic but there are significant upgrades in the pipeline. Nice of you to drag up this old post 🙂 Well I got it sorta right, it did rally early in January. The fact that it couldn’t go higher despite all real money buyers is probably another very bearish indicator?
    Btw the %age chance is derived from the futures mkt and what they are pricing in

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