September is known for shaking global markets — from stocks and bonds to gold, history shows that few assets escape the seasonal slump that typically strikes this month. But there's one outlier that's repeatedly delivered when everything else stumbles: the U.S. dollar.
- The UUP ETF is down nearly 10% year-to-date. Is it poised for a September rebound?
Cash Is King In September: The Dollar's Seasonal Strength Stands Alone
As September kicks in, investors are taking risk off the table and shifting to cash.
While the SPDR S&P 500 ETF Trust (NYSE:SPY) has averaged a 1% decline in September over the past decades, and gold has posted a 1.81% average drop over the past 10 years in the same month, the U.S. Dollar Index (DXY) has quietly proven to be a reliable performer.
In the last 10 years, the DXY Index has gained 0.91% on average in September, closing the month higher 7 out of 10 times — the best performance for any month in the period.
Going back 20 years, the trend holds up. The dollar has delivered an average September positive return of 0.50%, with a 60% winning rate, making it the third-best month for the U.S. Dollar Index after May (up by 0.84%) and October (up by 0.52%).
This pattern suggests a seasonal rotation into cash, often driven by heightened volatility, risk aversion, and reduced liquidity across markets.
| Year | Dollar Index performance in September |
|---|---|
| 2005 | 2.22% |
| 2006 | 1.08% |
| 2007 | -3.80% |
| 2008 | 2.67% |
| 2009 | -1.94% |
| 2010 | -5.39% |
| 2011 | 5.99% |
| 2012 | -1.57% |
| 2013 | -2.27% |
| 2014 | 3.85% |
| 2015 | 0.55% |
| 2016 | -0.58% |
| 2017 | 0.44% |
| 2018 | -0.01% |
| 2019 | 0.47% |
| 2020 | 1.89% |
| 2021 | 1.73% |
| 2022 | 3.14% |
| 2023 | 2.41% |
| 2024 | -0.96% |
| Average (Last 20 years) | +0.50% |
| Average (Last 10 years) | +0.91% |
Could 2025 Be Any Different?
So far, 2025 has told a very different story for the dollar.
The U.S. Dollar Index is down 9.6% year-to-date through Sept. 3, hit by tariff-related uncertainties and expectations over easier Fed policy.
In August alone, the DXY slid 2.2%. But here's where history gets interesting:
In the past 20 years, when the dollar had a negative year-to-date performance by the end of August, September closed with gains in four cases, averaging a 0.52% return.
| Year | YTD Through August (%) | September (%) |
|---|---|---|
| 2006 | -6.80% | 1.08% |
| 2007 | -3.71% | -3.80% |
| 2011 | -6.33% | 5.99% |
| 2016 | -3.55% | -0.58% |
| 2017 | -10.76% | 0.44% |
| 2020 | -3.59% | 1.89% |
| 2024 | -0.96% | -0.96% |
Even more intriguing is the short-term bounce that often follows a weak August for the greenback.
When the dollar declined in August, four Septembers ended in the green, averaging a 0.18% gain overall.
| Year | August (%) | September (%) |
|---|---|---|
| 2005 | -1.98% | 2.22% |
| 2006 | -0.29% | 1.08% |
| 2009 | -0.22% | -1.94% |
| 2012 | -1.73% | -1.57% |
| 2015 | -1.55% | 0.55% |
| 2020 | -1.29% | 1.89% |
| 2024 | -2.19% | -0.96% |
These historical rebounds suggest that weakness in August doesn’t necessarily bleed into September. In fact, it often reverses.
Bottom Line
While markets brace for turbulence — and gold, equities, and bonds flash seasonal warnings — the dollar quietly becomes September's most consistent performer.
With the DXY down sharply in 2025, the conditions may be in place for yet another September comeback.
Cash, as it turns out, really is king in September.
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Photo: Morrowind/Shutterstock
