Trans-Atlantic Exchange Rate Report for Sep. 26th – Oct. 2nd

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 Sep. 26th – Oct. 2nd, the Trans-Atlantic currencies had a mixed week. The euro (EUR) led the way by a wide margin, closing at 1.58%. The Canadian dollar (CAD) finished second at 0.69%. The pound (GBP) came in third at 0.39%. The Swiss franc (CHF) was the only currency to finish lower, closing at -0.27%.

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 Sep. 26th – Oct. 2nd, 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

US NFP Data Surprises to the Downside; USD Dips

The article, published on October 2^nd, explains that US nonfarm payrolls rose just 29,000 in September, far below the 84,000 expected, with unemployment rising to 4.2%. The article notes the weak jobs data triggered a sharp drop in the dollar as markets repriced the Fed outlook. On the same day, eurozone flash CPI came in above expectations, giving the euro a further boost and sending it to the week’s biggest gain among the four currencies.