Statistical analysis suggests there is a strong possibility the Australian Dollar will gain further on its Scandie rival over the short term.

Analysis of statistical data shows the Aussie Dollar tends to perform strongly against a selection of currencies each year in October, with returns averaging somewhere close to 2%.

“Based on our analysis, the best seasonal returns in October lie in going long AUD and NZD against the SEK,” says Khoon Goh, a strategist at Australia & New Zealand Banking Group (ANZ).

The Australian Dollar has risen against the Swedish Krona during October in 15 out of the last 17 years, according to Goh, with returns averaging 1.8%.

“Most currency-seasonality analysis focuses only on the average percent change metric (ie spot return),” explains Goh. “In our seasonality analysis of the period between 2000 and 2016, we focus on the frequency as well as the magnitude of the moves.”

The Australian Dollar to Swedish Krona rate rose 0.42% Friday to change hands at 6.36 around the London close, taking total September gains to 1.24%.

Goh’s statistical and performance analysis suggests there is a strong possibility the Australian Dollar will gain further on its Scandie rival over the short term.

“With markets slowly pricing in a tightening by the Reserve Bank of Australia, the AUD could be set to repeat its seasonal outperformance this October,” says Goh.

However, traders should keep one eye on European Central Bank talk toward the end of the month as monetary policies in Sweden and the Eurozone are heavily intertwined.

The ECB is broadly expected to begin tapering its QE program at the end of next month, which could open the door for the Riksbank to begin withdrawing some of its own stimulus, leading to upside in both Euro and SEK currencies.

“The growth outlook remains solid and the RBA’s recent shift in bias – which prompted us to pencil in two rates hike in 2018 – means the AUD remains well supported,” Goh wrote in a Friday note.

The Dollar’s fortunes against the G10 basket over the broader term will be dependent on a range of factors, from RBA policy and the Chinese economy, to events elsewhere in other economies.

“That said, this tightening cycle is likely to be very shallow; and a move of this magnitude has largely been accounted for by investors,” adds Goh. Strategists at Morgan Stanley concurred with that medium term prognosis Friday.

“The AUD and GBP rate curves appear to be overpriced for next year or have reached limits, without a significant pick-up in economic data. Both these currencies are added to our sell list,” wrote Hans Redeker, in a note to clients.