Seasonal bias favouring the US Dollar has not been in evidence in 2023 yet, as economists at MUFG Bank note. 

Balance of risks for the Dollar is shifting

“Momentum is turning more USD positive, most of all versus GBP and next for EUR.”

“It might not take much from here for investors to starting considering the risk of the US terminal rate ending higher than the level currently flagged by the FOMC (5.00%-5.25%) and any disappointment tomorrow after months of good inflation news could trigger an outsized move in rates and a further rebound for the Dollar. That seems the greater risk following the jobs report.” 

“Don’t forget the seasonal bias favouring the Dollar at this time of the year too – January and February is one of the two best periods for the greenback throughout the year and we haven’t seen much of that since the start of the year.”