Main Six Exchange Rates Report for October 23 – October 27
By: The Quinnipiac University Economics Research Team, Dan Hogan
Main Six Currencies Index
Source: Yahoo Finance and own calculations. Exchange rates are inverted to be USD per local currency (i.e., an increase indicates a stronger domestic currency) and then indexed to be 100 at the start of the period.
For the week of October 23rd – October 27th, most currencies weakened against the United States Dollar (USD). Both European currencies, the British pound (green) and the euro (blue) saw a nearly one-percent gain against the USD by October 24th, only to have those gains erased with the pound finishing the week back at and the euro finishing down 0.2%. The Australian dollar (grey) closed out the week slightly better than all other currencies, gaining about 0.1% against the USD. Ending the week down 0.4%, the Japanese yen (black) did marginally better against the USD than the Canadian dollar which finished down 0.6%.
Main Six Historical Trends
Source: Yahoo Finance and own calculations. Exchange rates are inverted to be USD per local currency (i.e., an increase indicates a stronger domestic currency. The center line is a rolling three-month average. The upper and lower boundaries are the average plus and average minus one standard deviation, respectively, for the same three-month period.
For the week of October 23rd – 27th, most currencies remained near their lower bound, with exception of the Candian dollar (CAD). After weakening against the USD this past week, the CAD dropped below the lower bound; a trend of depreciation is starting to emerge as the CAD has fallen nearly continuously since mid-September. For the British pound (GBP), euro (EUR) and Australian dollar (AUD), they have continued to see movement, but consistently remain near their lower bounds. Meanwhile, the yen (JPY) has remained nearly perfect along its lower bound, showing little movement. The currencies continue to settle against the USD, while the CAD has continued its months long trend of depreciation.
CAD / USD:
This article covers possible reasons for the CAD weakening against the USD, and predicts a bearish outlook, favoring the USD.
JPY / USD:
This article continues to cover the possible intervention by the Bank of Japan, which partially explains why the currency has remained so stable.