Foreign Currency Update

Foreign Currency Update.

The U.S. Dollar fell in value after the Federal Reserve announced another interest rate cut, however the weakness was fleeting and the greenback rose back to its highs of the month. The DXYDollar index, an index that measures the U.S. Dollar’s value against a basket of major currencies, fell from 98.45 to 97.24 before returning to 98.40. Against the Thai baht, the rate moved from 30.26 to 30.39, showing that the Thai currency weakened, but only very slightly.

The Poundhas managed to keep most of its gains from the previous month’s move against the U.S. Dollar, remaining broadly in the range of 1.2750 to 1.2950. This is likely to be due to the reduced chance of a no-deal Brexit. With the Brexit deadline extended, the focus is now on the snap general election and also economic factors including a slightly more dovish stance by the Bank of England at its latest interest rate meeting. Economic matters such as downgrades by major credit rating agencies had taken a back seat but appear to now be coming to the fore. Of course Brexit will rear its head again soon enough too. Against the Thai Baht, the Pound was range bound between 38.70 and 39.20.

The U.S. Dollar vs. Japanese Yencross rate was choppy but generally on a weakening trend. The yen moved from 108.10 to 109.23, a moderate move for the pair. When the cross rate rises, it indicates that the Dollar buys more Yen and so the Yen is reduced in value. Given that the dollar hasn’t moved much, the weakness is mainly Yen based, but is not large enough to be considered significant.  Against the Thai Baht, the Yen fell from 0.2797 to 0.2757.

The Russian Ruble has been almost entirely flat against the U.S. dollar moving in just a 0.5 Ruble range from 64.2 to 63.7. This very quiet month may precede a more volatile outbreak later on. Against the Thai Baht the Ruble was also flat at 0.4750

The Euro / U.S. Dollar exchange rate rose from 1.1019 to 1.1180 as the greenback weakened but reversed course and ended up almost back at the start position at 1.1024. Even though the ECB has decided to push interest rates deep into negative territory there has been no noticeable effect on the currency and this is borne out by the fact that the moves in the last month were dollar driven rather than Euro driven.Against the Thai Baht, The Euro moved from 33.45to 33.70 only to return back to 33.45.