Trans-Atlantic Exchange Rate Report October 27th –31st

By: David R. Fredericks, The Quinnipiac University Global Economics Research Team

Trans-Atlantic Currencies Index

Source: Eurostat 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 100 at the start of the period.

During the week of October 27 – 31, major Trans-Atlantic currencies displayed broad resilience against the U.S. dollar. The British pound (GBP) recorded the largest gain—rising roughly +1.3 percent—followed by the Swiss franc (CHF) and euro (EUR), which appreciated about +0.8 percent each. The Canadian dollar (CAD) declined mid-week but ended the period close to its starting level.

According to some analysts, the week’s performance was consistent with a pause in U.S. dollar momentum and generally stable European macro indicators. Others noted that commodity-linked currencies such as the Canadian dollar remained sensitive to oil-price volatility. Regardless of interpretation, the week was marked by steady European currency behavior and limited cross-rate volatility.

Trans-Atlantic Historical Trends

Source: Yahoo Finance and own calculations. Exchange rates are inverted to be USD per local currency. The center line represents a rolling three-month average, while the upper and lower boundaries correspond to one standard deviation above and below that average.

From mid-July through late October, the four currencies continued to diverge in trajectory. The Canadian dollarpeaked near 0.735 USD during the summer before easing lower through September and October. The Swiss francremained near multi-month highs, the euro traded within a narrow range around 1.17 USD, and the British poundrebounded through October after a period of volatility.

Some observers have suggested that these patterns reflect differences in monetary-policy expectations and exposure to commodity markets. However, no single factor fully accounts for the variation. In aggregate, European currencies appear to have stabilized, while the Canadian dollar has remained more closely linked to energy-price movements.

Outlook

According to market commentators, upcoming inflation releases in the euro area and the U.K. could influence short-term exchange-rate momentum. Some expect continued range-bound trading as participants evaluate policy divergence between the European Central Bank, the Bank of England, and the Federal Reserve.

Overall, the final week of October was characterized by incremental European currency firmness and subdued U.S. dollar strength, a combination that analysts view as signaling a period of relative Trans-Atlantic stability heading into November.