Trans-Atlantic Exchange Rate Report for August 16th – 21st
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By: Matthew Natof, The Quinnipiac University Global Economics Research Team
Trans-Atlantic Currencies Index
Source: Yahoo 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 August 16th – 21st, the Trans-Atlantic currencies all ended the week lower. The Swiss franc (CHF) fell the most, closing at -1.55%. The euro (EUR) and Canadian dollar (CAD) finished close together, closing at -1.10% and -1.00% respectively. The pound (GBP) held up best, closing at -0.85%.
Trans-Atlantic Historical Trends
Source: Eurostat 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.
From August 16th – 21st, the Trans-Atlantic currencies all moved higher over the period shown. The Canadian dollar (CAD) climbed above its three-month average, finishing close to its upper bound. The Swiss franc (CHF) remained below its lower bound throughout the week. The euro (EUR) climbed well above its upper bound, finishing near a three-month high. The British pound (GBP) also climbed above its upper bound, finishing at its highest level of the period shown.
Additional Reading
The article, published on August 21th, explains that the euro broke above its 200-day moving average against the dollar after the U.S. Treasury increased its bond buyback programme, pushing long-term Treasury yields lower and weakening the dollar. The article notes that if the Treasury continues to suppress stress in the bond market, the dollar could keep falling, which would support further gains for the euro and other major currencies.
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