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  • QU Economics Research Team

Trans-Atlantic Exchange Rate Report for March 25 – March 29 

 

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 25th to 29th, all Trans-Atlantic currencies slightly depreciated against the dollar. The Canadian dollar (CAD) lost 0.63% of its value at the outset of the week, but, with modest gains throughout the week, closed the week down by only 0.1%. The Swiss franc (CHF) saw the greatest overall losses this week, but a sizeable recovery on Friday meant it was not this week’s worst performer; it finished down by 0.38% for the week. The Euro (EUR) loss of value throughout the latter half of the week left it down by 0.63%, the largest loss of any currency this week. The British pound (GBP) trended similarly to the Euro in the first half of the week, but was more stable in the second half. It lost 0.3% of its value during 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 slight depreciation of the Trans-Atlantic currencies this week can be seen in their three-month averages. The Canadian dollar (CAD) dipped below and then back above its lower bound. The Swiss franc (CHF) continued the downward trajectory it has been on for the last three months; it currently stands well below its lower bound. The Euro (EUR) has fallen again to its lower bound after remaining above it throughout this month. The British pound (GBP) reached its lower bound as well after a sharp fall from above its upper bound.


Further Reading: 



Bloomberg article discussing how the SNB’s surprise rate cuts last week have moved up the timeline for parity with the Euro. Investors now expect the franc and euro to be equal in value in the third quarter of this year, rather than the fourth quarter of next year. It also mentions that low Swiss rates will make it an attractive currency to borrow and invest in other countries. 

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