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  • QU Economics Research Team

Pacific Exchange Rates Report for February 19th – 23rd 


Pacific 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.  


Throughout the week of February 19th to the 23rd, a notable dispersion in currency behavior occurs, a pattern not seen in recent weeks. Beginning with the standout performer of the week, the New Zealand dollar (blue) demonstrates impressive consistency, ascending by approximately 0.3% each day, finishing the week with a substantial 1.3% rise against the USD. Similarly, the Australian dollar (green) also follows an upward trajectory, although experiencing a slight setback midweek, resulting in a modest 0.5% increase overall. Alternatively, the Japanese yen (maroon) initially remains steady, briefly showing promise midweek with a 0.3% uptick, only to fall again, ultimately resulting in a 0.4% decline by week's end. However, the most surprising behavior of the week is revealed by the South Korean won (red). Despite recent volatility, typically illustrating significant movements, the won exhibits a gradual decline of 0.4% through the week before concluding on an optimistic note with a 0.4% increase, effectively offsetting its earlier decline. Hopefully alluding to a stronger performance for the upcoming week.



Pacific 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. 


During the week of February 19th to the 23rd, all four currencies seem to be behaving individually, as opposed to their usual synchronized movements. The Australian dollar (AUD) finally breaks free from a prolonged decline, surpassing the lower bound and hopefully making its way back up towards the rolling three-month average. Likewise, the South Korean won (KRW) remains on the lower bound but concludes the week with a notable increase. On the other hand, the Japanese yen (JPY) remains below the lower bound but declines before the week's end, casting doubts on its prospects for the following week. Last but certainly not least is the New Zealand Dollar (NZD), staging a remarkable recovery, reversing a month-long decline with a substantial rise above the average, potentially changing the trajectory of this currency in the weeks to come.



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