One of the many surprising aspects of financial market performance over the past year has been the weak performance of the US dollar, which has fallen by close to 10 per cent on a trade weighted basis and by more than 10 per
cent against the euro.
In the December quarter, the US dollar declined by 8 per
cent against the euro, 7 per cent against the yen and 5 per cent on a broad trade - weighted basis.
In the final three months of last year the US dollar declined by 8 per
cent against the euro and 7 per cent against the yen, to be around its lowest level in the past decade.
The local currency was up by 8 per cent against the US dollar and about 7 per
cent against the euro but flat against the Japanese yen.
Not exact matches
The dollar has eased off in the last couple of days since Trump complained about it being too strong, but, after rising half a
cent on the back of Draghi's press conference, it's still close to a 14 - year high
against the
euro.
Given the movements in interest rates in the past year along with the dollar's fall it is reasonable to estimate that expectations of exchange rates of the dollar
against the
euro 10 years from now have fallen by perhaps 15 per
cent.
After reaching a record high
against the US dollar of US$ 1.293 in mid February, the
euro depreciated over subsequent months and is now about 6 per
cent below its mid-February peak (Graph 24).
Canada's dollar — which hasn't been below 69
cents since April 2003 — was also down Friday
against the
euro, British pound and Japanese yen.