Trans-Atlantic Exchange Rate Report for June 22nd – 26th

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 June 22nd-26th, all Trans-Atlantic currencies fluctuated in a similar pattern. The Canadian dollar (CAD) appreciated at the start of the week but then depreciated, ending at a 0.2% increase. The Swiss franc (CHF) followed suit but was slightly above the Canadian dollar, landing at an increase of 0.25%. The euro (EUR) was this week’s highest value, landing at a 0.58% increase. The pound (GBP) started negative, but later rose into the positives, finishing at this week’s low of 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 June 22nd-26th, all the Trans-Atlantic currencies increased from last week. The Canadian dollar (CAD) appreciated but still ended well below its lower bound. The Swiss franc (CHF) was similar, also ending far beneath its lower bound. The euro (EUR) steadily appreciated but remained well below its lower bound. The British pound (GBP) was identical to the first two currencies and also landed far under its lower bound.

Additional Reading

FOREX-Dollar at 13-month high as rate hike bets, stock rout boost demand

The article, published on June 23rd, explains that the U.S. dollar reached a 13-month high because investors expected the Federal Reserve to keep interest rates higher for longer. A drop in technology stocks also caused investors to move their money into the U.S. dollar, which is considered a safer investment. As demand for the dollar increased, the Canadian dollar, Swiss franc, euro, and British pound all fell in value against it over the next few days.