Foreign Currency Update

Foreign Currency Update.

The US Dollar rose slightly but there could be more to the modest move than meets the eye. On the one hand, expected interest rate rises are pushing the dollar higher, whilst on the other hand the recent trade tariffs imposed by the U.S. arguably sent the dollar lower. The net effect has been that these important news stories have cancelled each other out and so there was not much movement overall for the US Dollar. The DXY Dollar index, (an index that measures the US Dollar’s value against a number of other currencies), rose from a low of 89.01 to hit 90.19. Against the Thai Baht, the Dollar moved from 31.28 to 31.22, a very modest move indeed.

The British Pound dropped from a high of 1.4028 against the Dollar to move as low as 1.3728 before rebounding to 1.3934 and onto 1.4150. The 1.38 to 1.42 range appears to be holding and with Dollar moves hard to find, volatility could continue to be low. The BOE has continued to signal that higher UK interest rates may be on the cards in the future, so there could be a boost to the Pound’s value in the medium term. Against the Thai Baht the Pound fell very slightly from 43.86 to 43.81

The USD/JPY cross rate has also seen a very quiet time with Dollar stability underpinning the pair. The Yen did move from 106.01 to as high as 107.55 before dropping back to 105.96. Against the Thai Baht, the Yen’s movement was like a millpond starting the month at 0.2945, rising to 0.2971 and then falling back again to exactly the same level.

The Russian Ruble has arguably been the only real mover with some weakening against the U.S. Dollar seen over the course of the last month. It moved from 56.20 to 57.52, an approximately two percent move. There seems little to explain the move given that the dollar has been so stable, however you would have to look towards local news surrounding the Ruble to find any reason for its isolated weakening. When compared to the Thai Baht, a similar move took place with the pair losing ground from 0.5560 to hit 0.5427, a loss of around two percent also.

The Euro/USD rate moved in a choppy fashion during the last month from a high of 1.2418 to hit a low of 1.2180 before recovering to 1.2302. Given that the Euro forms the largest part of the basket of currencies that trades against the US Dollar it is unsurprising to see generally sideways movement. Against the Thai Baht, the Euro saw some modest weakening in line with its movement against the US Dollar, falling slightly from 38.89 to 38.41.