Trans-Atlantic Exchange Rate Report for June 29th to July 3rd

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 29th to July 3rd, the Trans-Atlantic currencies all landed at separate points. The Canadian dollar (CAD), the outlier, appreciated at the start of the week but then slightly depreciated, ending at this week’s only increase of 0.14%. The Swiss franc (CHF) followed suit at the start of the week but later depreciated to -0.71%. The euro (EUR) was similar to the Swiss franc but did not depreciate as much, finishing at -0.41%. The pound (GBP) plummeted nearly the entire week, landing at this week’s low of -1.03%.

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 29th to July 3rd, all the Trans-Atlantic currencies moved along different paths. The Canadian dollar (CAD) was relatively stable, trading below its lower bound. The Swiss franc (CHF) appreciated for most of the week, finishing closer to its lower bound. The euro (EUR) also steadily appreciated but remained well below its lower bound. The British pound (GBP) appreciated sharply, ending above its lower bound.

Additional Reading

Dollar slides after soft jobs report, yen surges

The article, published on July 1st, explains that the U.S. dollar fell after a weaker-than-expected U.S. jobs report lowered expectations for future interest rates. Investors adjusted their positions in the currency market, causing the euro and other major currencies to strengthen against the dollar, while markets reacted to changing expectations about the U.S. economy and Federal Reserve policy.