Pacific Exchange Rates Report for October 28th – November 8th
By: Gabriel Kukulka, The Quinnipiac University Economics Research Team
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.
Between October 28th and November 4th, all tracked Pacific exchange rates trended downward, followed by a spike on November 5th. After this brief increase, rates experienced a slight decline. The South Korean won (red) rose by nearly 1.5% on November 6th but later decreased, finishing with a modest gain of 0.36%. Other Pacific currencies ended the second week in negative territory, with the Australian dollar (green) posting the largest drop at 0.27%, followed by the Japanese yen (maroon) at a 0.18% decline, and the New Zealand dollar showing only a slight decrease, ending down 0.07%.
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.
The U.S. dollar has continued to strengthen against the tracked Pacific currencies. After a highly volatile two-week period, the Australian dollar remains at elevated levels not observed since early September. The Japanese yen has been trending significantly downward since mid-September, indicating an increasingly weaker domestic currency. The South Korean won saw a substantial rise this past week, with its exchange rate now positioned well above the upper boundary of its three-month rolling average. The New Zealand dollar has also been declining steadily, a trend that began in early October. Overall, all Pacific currencies appear to be weakening against the U.S. dollar.
Additional Reading
The article highlights how China’s rumored $12 trillion stimulus package could strengthen the Australian dollar by boosting demand for Australian exports, thereby lifting the AUD/USD exchange rate. The Reserve Bank of Australia may consider rate cuts if inflation eases or unemployment rises. New Chinese stimulus focused on consumption could also ease concerns about Trump’s tariffs following his U.S. election win, potentially supporting the AUD/USD rate. In Japan, a steep drop in household spending, combined with a strengthening U.S. dollar against the yen in the USD/JPY exchange rate, may pressure the Bank of Japan to raise rates if the yen weakens further, as private consumption represents around 60% of Japan’s GDP.
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