Trans-Atlantic Exchange Rate Report for February 2nd – 6th

By: Michael Horvath, The Quinnipiac University Global Economics Research Team

Trans-Atlantic Currencies Index

Source: Eurostat 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 2nd-6th, the Trans-Atlantic currencies shared a common outcome despite variation in their respective journeys. The Canadian dollar (red) appreciated nearly the entire week, with the majority taking place during the beginning of the week, closing at an increased 1.05%. The Swiss franc (maroon) showed the greatest early week gains before a subtle depreciation in the midweek, where it achieved a week-long high as it closed the week at a positive 1.26%. The euro (blue) displayed a consistent appreciation through the midweek before a small decrease into February 4th, before once again increasing to close the week at a growth of 1.06%. The British pound (green) proved a volatile journey as the currency displayed weak early week gains, followed by a subtle depreciation, before surging to close the week at an increased 1.26%.

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 February 2^nd-6^th, the Trans-Atlantic currencies shared a common theme across their journeys. The Canadian dollar (CAD) showed a subtle depreciation from its three-month high to now residing just above its upper bound. The Swiss franc (CHF) also fell from its three-month high, however still displays a large gap between its current value and the upper bound. The euro (EUR) experienced a significant depreciation as it fell from 1.20 to 1.18, a loss of 0.02, now resting just above the upper bound. The British pound (GBP) experienced a similar loss as the currency fell below its upper bound temporarily, before once again climbing over the upper bound value.

Additional Reading

Eurozone Inflation Lower Than Expected in January

The euro inflation has fell to 1.7% despite the ECB’s projected target of 2%. This occurrence is unlikely to cause immediate action, such as an interest rate cut. Equity markets view this as evidence of controlled inflation in Europe and generating the expectation of potential interest rate cuts during 2026. With the headline interest rate now below the target level, the ECB looks to ignite economic growth in 2026.