Trans-Atlantic Exchange Rate Report for July 12th – 17th

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 July 12th – 17th, the Trans-Atlantic currencies diverged in performance. The Canadian dollar (CAD) depreciated throughout the week, finishing at this week’s low of -0.92%. The Swiss franc (CHF) fluctuated this week, ending at the lone positive value of 0.01%. The euro (EUR) was similar to the Swiss franc but appreciated sharply to end the week at -0.04%. The pound (GBP) plummeted nearly the entire week, but increased on the final day to land at -0.11%.

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 July 12th – 17th, three of the Trans-Atlantic currencies followed a similar path. The Canadian dollar (CAD), the outlier, appreciated throughout the week, landing below its three-month average. The Swiss franc (CHF) appreciated at the start of the week but later depreciated below its lower bound. The euro (EUR) was very similar, landing below its lower bound as well. The British pound (GBP) followed suit, but started the week higher, ending below its upper bound.

Additional Reading

Sterling dips but on track for weekly rise as Burnham poised for power

The article, published on July 17th, explains that the British pound rose due to investors becoming more confident in the UK's economic outlook after reports that the new prime minister would choose a fiscally responsible finance minister. This increased demand for the pound and helped it outperform the Canadian dollar, euro, and Swiss franc during the week.