Trans-Atlantic Exchange Rate Report for February 19 – February 23

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 February 19th to February 23rd, Trans-Atlantic currencies differed in their performance against the US dollar. The Canadian dollar (red) lost value in the first half of the week, depreciating by 0.42% by Wednesday. However, it regained value over the next two days, closing Friday down by only 0.12%. The Swiss franc (maroon) experienced a sharper initial loss of value, depreciating by 0.34% by Tuesday, but it recovered through the middle of the week. With a minor loss of value on Friday, it closed the week down by 0.02%. The Euro (blue) and British pound (green) had an upward trajectory throughout the week, apart from a slight dip on Tuesday. By Friday, the Euro and pound had gained 0.48% and 0.51%, 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.

The Canadian dollar (CAD)'s loss and recovery this week are reflected in its three-month average; a movement below and then back to its three-month average is evident. The Swiss franc (CHF)'s value was stable this week, but the currency's value is at a nearly three-month low, hugging its lower bound. The gains of the Euro (EUR) this week brought it back above its lower bound, following a steady decline throughout January and most of February. After nearing its lower bound last week, the British pound (GBP) has crossed above its three-month average for the first time since the beginning of the month, when it fell from the heights it reached during the holiday season.

Further Reading:

Dollar index on track for first weekly fall this year

Reuters article characterizes currency changes this week as a slight decline in the value of the dollar as investors prepare for Fed Rate cuts in the summer.