Will the US dollar continue to shine?

Dollar bulls emboldened by Donald Trump's win are entering a month that has historically punished the greenback.

The US currency has advanced about 2 per cent since the Nov 5 election, but seasonality shows the odds are stacked against it from here. The greenback posted losses in eight of the last 10 Decembers, often a victim of year-end portfolio rebalancing flows and the so-called Santa Rally that emboldens traders to sell dollars for riskier assets like stocks.

The chances of outsized, sudden swings are greater this time round, with the risk of the US President-elect's social media posts roiling markets, unnerving traders in a month that also has nine major central bank policy meetings and a deluge of key economic data. Any whiff of a negative surprise could trigger a stampede to the ultimate haven currency, rendering the "sell the dollar" narrative obsolete.

"Better hold on to your seats," said Mr Vishnu Varathan, head of economics and strategy at Mizuho Bank. "It's usually about pushing the pedal for risk-on and selling dollars, but with Trump coming into power, who knows?"