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  • QU Economics Research Team

Trans-Atlantic Exchange Rate Report for March 18 – March 22 

 

Trans-Atlantic Currencies Index 


Source: Yahoo Finance 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 March 18th to March 22nd, the Trans-Atlantic currencies either declined or roughly held their value against the dollar. The Canadian dollar (red) was quite stable throughout the week, never deviating from its initial value by more than 0.5%; it finished the week up by only 0.08%. The Euro (blue) followed a similar trajectory, although more pronounced losses on Friday left it down by 0.2% for the week. The British pound (green) trended similarly as well, although it experienced larger losses again on Friday, closing the week down by 0.66%. Unlike the other currencies, the Swiss franc (maroon) lost value at the beginning of the week, and, with the greatest decline in value on Friday, it was the worst performer of the week. It posted a loss of 1.5% for the week.

 

 

 

Trans-Atlantic Historical Trends 


Source: Yahoo Finance 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. 


The changes over the last week are reflected in the currencies’ three-month averages. The Canadian dollar (CAD) briefly moved away from its lower bound but fell back towards it. The Swiss franc (CHF) continued its downward trend that began in the middle of the month. Its value has fallen considerably below its lower bound, reaching at least a three-month low. The Euro (EUR) briefly moved above its three-month average but then fell back below it, following a trajectory parallel to the CAD, as observed this week. The British pound (GBP) fell sharply to just below its three-month average, indicating a strong reaction after its spike in value over the previous two weeks.



Further Reading: 

Bloomberg article discussing “surprise” rate cut by the Swiss National Bank after it successfully kept inflation below target last year. The SNB is one the first major central banks to cut rates. 

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