Main Six Exchange Rates Report for September 25 – September 29
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 period of September 22nd to September 29th there was general deprecation across all major currencies against the USD. The Candian Dollar (CAD) remained relatively even with the US Dollar, ending the week down about .1%. Both the Euro (EUR) and the British Pound (GBP) saw continuous declines though the week, only to see a small rally to end out the trading down .2% and .4% respectfully. The Australian dollar (AUD) was the sole currency that strengthened against the USD, gaining 1.5% on Thursday to finish the week up .3%. Only the Japanese Yen (JPY) did not see any gains late in the week, as it weakened against the USD by roughly 1.1%.
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 September 22 – 29, a majority of the trends remained continuous. Throughout the five currencies, some have started to stabilize from their respective highs in the summer, while others have yet to see a sign of slowing the depreciation against the USD. The Euro (Blue), and Yen (Black) are weakening against the USD at a relativity consistent rate. Both currencies remain below the mark of the lower one standard deviation on the three-month rolling average. The British Pound (Green) continues to depreciate at an increasing rate, plummeting beyond the lower mark of one standard deviation. The Candian Dollar (Red) weakened over the past week, putting an end to the nearly month-long rally. To close out the five major currencies, the Australian Dollar (AUD) remained nearly in line with the lower mark of one standard deviation, holding steady for about the past six weeks.
Further Recommended Reading
British Pound Outlook: GBP/USD on Forex.com.
This article argues that despite the data stating that the GBP / USD is oversold (or undervalued), the contrasting actions of the Bank of England (keeping interest rates the same) and the Federal Reserve (wanting to hike the interest rates) could keep any rally from happening.
USD/JPY Forecast: Price Tensions Amid BoJ Surveys and Fed Speaks on FX Empire.com
This article mentions that the actions of the Federal Reserve will also have a significant effect on the trade of these two currencies.