Investing.com – The U.S. dollar usually enjoys the month of May, according to analysis from UBS, but this year seems to be different.

“May has historically been a positive month for the dollar: our seasonality indicator suggests that the bid for USD usually picks up in late April and culminates around the middle of May, with EUR, AUD and NZD typically the most impacted,” analysts at the Swiss bank said, in a note dated May 13.

However, the dollar has seen little seasonal boost so far, UBS said, which intuitively aligns with a lack of ‘sell in May’ tendency in equities thus far. 

While benign corporate earnings and a dovish FOMC shift have likely been the main explanation, we also observe that negative May equity returns have actually become less prevalent in the last 10 years, with only 2019 being negative. 

“More specifically for FX, this is also an indication that the market might already be long USD for positive carry and as a defensive hedge,” UBS added. “This prevents the type of disruptive and USD-positive risk unwinds that may have taken place in past episodes, when the dollar was more of a risk funder.”