Trans-Atlantic Exchange Rate Report for August 9th – 14th

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 9th – 14th, the Trans-Atlantic currencies all finished lower except for one. The Swiss franc (CHF) was the standout, finishing as the only currency in positive territory at 0.20%. The euro (EUR) held up second best, closing at -0.35%. The pound (GBP) ended the week at -0.65%. The Canadian dollar (CAD) struggled the most, closing lowest at -0.97%.

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 9th – 14th, the Trans-Atlantic currencies continued their recent recovery. The Canadian dollar (CAD) climbed back toward its three-month average but finished just below it. The Swiss franc (CHF) continued trading below its lower bound. The euro (EUR) climbed back above its lower bound and finished between the lower bound and three-month average. The British pound (GBP) climbed above its three-month average, finishing between the three-month average and upper bound.

Additional Reading

Euro Gains as Softer U.S. Inflation Hits US Dollar

The article, published on August 14^th, explains that the euro gained ground against the dollar after U.S. CPI and PPI data for July came in softer than expected, lowering the chances of a Fed rate hike. The article also notes that geopolitical tensions kept demand for the dollar as a safe haven elevated, which limited how far the euro could climb.