Trans-Atlantic Exchange Rate Report for January 19th – 23rd

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 January 19^th – 23^rd, the Trans-Atlantic currencies experienced similar outcomes with little variation in their journey. The Canadian dollar (red) displayed a resilient beginning of the week as the currency remained steady at its initial value, before experiencing depreciation through the rest of the week, finishing down 0.91%. The Swiss franc (maroon) proved the most negative journey as the currency experienced a sharp loss to begin the week, with a subtle return at the end of the week to mitigate further loss, before closing at -1.45%. The euro (blue) displayed a similar journey to the franc; however, the magnitude of loss was decreased. The currency fell through the midweek with a small increase in the end of the week, before a further loss to close at -1.06%. The British pound (green) displayed a minimal loss compared to its counterparts, even showcasing an increase during the midweek before a sharp loss to close the week at -0.94.

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 January 19^th – 23^rd, the Trans-Atlantic currencies took a rebound from the loss experienced last week as all currencies experienced a sharp increase. The Canadian dollar (CAD) is now approaching the upper-bound after ending last week at its three-month average. The Swiss franc (CHF) displayed a triumphant return as it has surpassed its upper-bound value after last weeks depreciation towards its lower-bound. The euro (EUR) proved resilience as the currency surpassed its upper-bound value from its previous position of below the three-month mean. The British pound (GBP) showed the least change, however still appreciated over its upper-bound value as it begins approaching its three-month high.

Additional Reading

The Canadian Dollar rises further as the US Dollar declines due to threats over Greenland

The Canadian dollar has strengthened over the US dollar after geopolitical events regarding further tariffs over the EU. Therefore, a large contributor to the change experienced is due to the depreciation of the US dollar, rather than the increase the Canadian dollar displayed. The increase in Canadian dollar appears to be a result of potential interest rate movement from the Bank of Canada. The factors influencing the currency movement are the interest rates, oil prices, and economic health.