- QU Economics Research Team
Trans-Atlantic Exchange Rate Report for April 8 – April 12
By: Ryan Slattery, The Quinnipiac University Economics Research Team
Trans-Atlantic 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.
From April 8th to April 12th, all Trans-Atlantic currencies depreciated against the US dollar. The Canadian dollar (red) began the week with a slight loss in value, and further midweek losses left it down by 1.04% for the week. The Swiss franc (maroon) followed a similar trajectory, ending the week 1.35% lower than it closed last week. The euro (blue) and British pound (green) began the week with slight gains, which were erased by significant losses at the end of the week; they closed down by 1.76% and 0.68%, respectively.
Trans-Atlantic 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.
Prior to this week, the Trans-Atlantic currencies were already hovering at or below their lower bounds; with this week’s loss of value, each currency is below its lower bound. In the past three months, the Canadian dollar (CAD) occasionally crossed over its lower bound, but now it has fallen well below it. The Swiss franc (CHF), which was already below its lower bound, has fallen further. The euro (EUR) plunged sharply, falling even lower than it did in February. The British pound (GBP) fell similarly. Each currency’s value is at a three-month low.
Further Reading:
Article that characterizes the Canadian dollar’s losses on Thursday as the result of the US CPI report showing higher inflation than expected. (Given that all Trans-Atlantic currencies exhibited similar behavior on Thursday, we can generalize this to a strengthening of the US dollar and a weakening of the Trans-Atlantic currencies.)