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Ready For the Seasonal Effect in Currencies?

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You know all about the January effect for stocks, but history suggests the euro could get interesting in December.

Retailers have been acting this way for months, but now the holidays really are right around the corner. If history is a guide, the euro could offer up some gifts.

For the past twenty years, the euro has been one of the currencies most likely to deviate positively from its trading pattern in December, thanks to portfolio managers trying to gussy up their holdings by taking on more risk. Data from Consensus Economics, a macroeconomic survey firm, has the euro ticking up 0.4%, on average, while the dollar tends to maintain and the Canadian dollar and British pound weaken. (The Swiss franc also tends to strengthen, measured in this case against the euro, but with the Swiss National Bank intervening so forcefully this year, all bets are off.)

You can check out the patterns in this Consensus Economics chart:

Still, this isn't exactly a normal year in Europe, and Andrew Busch, global currency and public policy strategist for BMO Capital Markets, is doubtful that the seasonal effect will amount to much. "There are just too many things going on" this year, he told CNBC's Melissa Lee.

Rebecca Patterson, chief markets strategist for J.P. Morgan Asset Management, Institutional, says the typical year end pattern "tends to weigh on the dollar and support risk currencies, including the euro." But she agrees that this year is hard to call: "You have a lot of head winds going on."

That's for sure. And that's why Brian Kelly, co-founder of Shelter Harbor Capital, thinks something else is going to have more of an effect on the euro. "The markets are starting to push the European Central Bank" to wade into the debt crisis, he says. "You talk about people wanting their books to look good. They're going to push the ECB to print money. A lot of people are long Italian bonds, and that will help that market."

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