As you can see, the latest heat map represents some major percentage changes among the top currencies. This points to some big and critical changes in the economic landscape. Looking at the global success of the U.S. dollar (USD) puts this into perspective. Importantly, it has exhibited extreme volatility relative to the euro (EUR), Japanese yen (JPY), and Australian dollar (AUD).
In the latest available data, that number is more favorable with the USD appreciating 0.30% against the EUR. This recent trend underscores the dollar’s significant strengthening against the euro. Despite these domestic weaknesses, the euro passes the stress test as it remains strong against most other major currencies. The USD climbed 0.36% vs. the JPY. The moves indicate an impressive stand for U.S. currency within Asian markets. The dollar was little changed against both the loonie and kiwi. It was up 0.03% vs the CAD and up 0.24% vs the NZD.
The USD was unchanged against the British pound (GBP), -0.00%. This continued stability is indicative of a relative state of equilibrium in trading conditions between the two currencies. The USD has been especially strong vis-a-vis the Australia dollar, picking up by 0.40%. This increase is indicative of the superior levels of investor confidence in the Australian economy relative to the U.S.
The EUR recorded its biggest losses against the other major currencies. It was down 0.31% against the GBP and down 0.27% against the CAD. The euro fell 0.11% against the Swiss franc (CHF) and 0.07% against the NZD. In spite of these declines, the EUR increased by 0.07% against the JPY. It was able to benefit from a minor 0.10% appreciation against the AUD.
Market observers argue that these changes represent a changed balance of risks over the past few months. Inflation rates, economic growth forecast and geopolitical tensions are a key factor in raising or lowering currencies. These factors are fueling unprecedented changes in the financial services landscape. With investors watching these dynamics semi-furtively, the stakes for international trade and investment strategies are enormous.