New York FX Traders Are More Bullish the Dollar Than Londoners

(Bloomberg) -- Depending on where you’re trading in the world, the sun might shine a little differently on certain currency pairs.

That’s what Vadim Iaralov, an FX strategist at Bank of America Corp., found while analyzing the dominant geographic regions for dollar, euro and yen cross trading during the first half of 2018. After using statistical analysis to identify the key time-zones for each pair -- those that best capture most of the spot trend -- he set out to determine how performance in those periods compared relative to the rest of the day.

The upshot is that the greenback outperforms in U.S. hours -- a bullish signal for the currency -- while the pound rallies during U.K. hours and the euro slumps disproportionately. The yen slides markedly during Asia trading, the analysis showed.

Here is Iaralov’s full breakdown of group-of-10 currency trading patterns during regional hours:

U.K. (8 a.m. to 1 p.m. GMT)

  • The euro dips sharply in local hours
  • Top five locally traded currency pairs in U.K. hours this year: EUR/SEK, GBP/USD, USD/SEK, EUR/USD and EUR/GBP
  • Locals have tended to have a more bullish view of GBP/USD
  • EUR/SEK and USD/SEK traded lower in local hours while rising globally in recent weeks

U.S. (1 p.m. to 12 a.m. GMT)

  • Dollar rises in local hours
  • Top five locally traded currency pairs in U.S. hours this year: USD/CAD, EUR/CAD, CAD/JPY, EUR/CHF and EUR/USD
  • Traders tend to be bearish on the Canadian dollar

Asia (12 a.m. to 8 a.m. GMT)

  • Yen moves lower in local Asia hours
  • Top five locally traded currency pairs in Asia hours this year: NZD/JPY, AUD/JPY, CAD/JPY, CHF/JPY and USD/JPY

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