Trans-Atlantic Exchange Rate Report for Oct. 5th – 9th
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 Oct. 5th – 9th, the Trans-Atlantic currencies had a mixed week. The Swiss franc (CHF) led the way, closing at 0.54%. The euro (EUR) finished second at 0.18%. The Canadian dollar (CAD) came in third at -0.08%. The British pound (GBP) was the only other currency to finish lower, closing at -0.20%.
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 Oct. 5th – 9th, the Trans-Atlantic currencies all pulled back. The Canadian dollar (CAD) dropped below its lower bound. The Swiss franc (CHF) also dropped sharply below its lower bound. The euro (EUR) dropped below its lower bound. The British pound (GBP) also fell below its lower bound.
Additional Reading
The article, published on October 8th, explains that the release of the official FOMC minutes from the September meeting reinforced a hawkish tone, showing that most Federal Reserve officials view inflation as the primary risk and believe another interest rate hike will likely be appropriate by year-end. Renewed expectations of elevated US yields and rising crude oil prices provided underlying support for the US dollar, pushing European majors toward multi-month lows before they found late-week support, while the Swiss franc (CHF) held up best as a safe haven.
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