In Which Month Should You Buy EUR?

What Is the best time of the year to buy Euro?

Figuring out when the best time of the year is to buy the EUR/USD pairing is no easy undertaking. If you’re knowledgeable about Forex, you’ll know that an almost uncountable number of factors can influence prices, from inflation rates to Central Bank policies. This makes it almost impossible to predict how markets will behave month to month.

Nevertheless, we can use past historical data and take a mathematical approach to calculating when is the best month of the year to trade EUR/USD. We can look at the average price of the currency pair each month since the euro first started trading, and then calculate the percentage price change from month to month. That’s exactly what I’ve done here.

This approach provides an objective method to analyze historical data without relying solely on subjective interpretations or opinions. It should help to identify recurring patterns or trends in the EUR/USD exchange rate over the years, and identify the months with historically higher or lower average price changes. This can lead to better-timed trades.

Here’s how I did the calculations:

First, I gathered data on EUR/USD prices for each month from 2002 to 2024. I took the average price for each individual month and put them into a spreadsheet.

Calculation of the average monthly % change in EUR/USD. Step 1.

After that, I calculated the price change as a percentage from month to month. As you’ll see from the table, price changes each month ranged from decreases of as much as -7.274% and increases of up to 6.495%. These price changes occurred from April to May, and September to October. We can see that average monthly price changes can fluctuate significantly.

Calculation of the average monthly % change in EUR/USD. Step 1.

Lastly, I calculated the average price change across the same month from 2002 through to 2024. The results can be seen in the chart below.

Average Monthly % Change of EUR/USD

So, what information can we glean from the data above? Because of how averages work, the chart doesn’t represent the larger price changes from month to month, so all price changes are in the range of -0.29% to +0.894%. We can see that on average, from 2002 to 2024, November into December saw the biggest price increases. January going into February saw the biggest price decrease overall.

Based on this data, the best time of year to buy the EUR/USD currency pair would be in November, going into December. Bear in mind that these numbers are based on averages. That means that the price could be low in early November, then high in late November, then drop in early December but rise again in late December, and still lead to a higher price change based on the price averages for each month. This chart does not guarantee a price increase from November to December.

According to TU expert Oleg Pylypenko traders could also buy EUR/USD when it reaches its lowest, which tends to be in February. Past data shows an average price of 1.2080 for February, the cheapest price of the year. This could be an optimal time to buy the pair.

There are several possible explanations for the data we see here:

• Year-end trading: Many traders and investors close their positions or adjust their portfolios as the end of the year approaches. This can result in higher demand for euros relative to the dollar, driving up the EUR/USD price.

• Holiday season: The holiday season in November and December often sees increased consumer spending and economic activity in the Eurozone, which can boost the euro's value against the dollar.

• Seasonal factors: Seasonal trends or patterns can influence currency markets, although these are often not consistent or predictable. Factors such as year-end corporate transactions, repatriation of profits, or portfolio rebalancing by institutional investors can contribute to the upward movement of the EUR/USD price during this period.

In summary, the tendency for the EUR/USD price to increase on average toward the end of the year, yet decrease at the start of the new year, is likely attributable to seasonal factors and changes in end-of-year supply and demand.

What month is EUR/USD most expensive?

In order to answer this, I calculated the average monthly price of EUR/USD from 2002 to 2024. Though the difference in prices wasn’t significant, there was a clear pattern. Prices tended to be highest in December, and lowest in February. The numbers are consistent with the price change data found in the previous section, and show that EUR/USD is most expensive in December, with an average price of 1.2263. EUR/USD price is usually lowest in February, at an average of 1.2080.

Average EUR/USD rate by months

Will Euro USD go up or down?

Making accurate predictions on whether EUR/USD will go up or down poses challenges, though there are current influential factors we can look at that could have an impact on price movements. 

• MUFG: Foreign exchange analysts at Mitsubishi UFJ Financial Group predict an end-of-2024 rate of 1.12 due to rate cuts by the Fed.

• Credit Agricole: The French international banking group expects the price to drop to 1.05 as a result of economic uncertainty in the Euro-Zone.

• ABN Amro: The Amsterdam-based Dutch bank expects the Fed and European Central Bank to cut interest rates in the coming months, leading EUR/USD rates to stay close to current levels, ending the year at 1.10.

Experts and analysts at Traders Union conduct daily price analyses and forecasts. You can see those here: EUR USD forecast – Analysis, Rate & Chart.