·
The foreign exchange value of the US dollar
versus major currencies fell yesterday to the lowest level since late 1996
(-15.1% y/y). Roughly 50% of US foreign trade is with the countries in the
major currency index.
· Against a broader basket of currencies, the US dollar has fallen a lesser 8.3% y/y. Over 40% of US foreign trade is with Mexico, China and other Asian countries. Against these countries the US$ has been relatively stable, or up versus the peso.
· The dollar's value has been notably weak versus the Euro which is up 19.1% y/y. The dollar also has weakened notably versus the yen as signs of Japanese economic improvement have emerged.
· Versus the UK pound, the dollar's decline recently has picked up steam losing 6.7% in just the last three months. UK economic growth has improved and inflation has been stable.
· Against the Canadian dollar the US currency has fallen out of bed, down 17.3% y/y.
· Exchange rate forecasting is discussed in this Federal Reserve Board International Finance Discussion Paper that could be found here.
| Exchange Rates |
11/20/03 |
12/31/02 |
Y/Y |
2002 |
2001 |
2000 |
| US$ Major Currency Index (3/73=100) | 85.15 | 97.65 | -15.1% | 103.08 | 104.26 | 98.42 |
| Japan (Yen/US$) | 108.99 | 118.75 | -11.3% | 125.22 | 121.57 | 107.80 |
| European Monetary Union (US$/Euro) | 1.1895 | 1.0485 | 19.1% | 0.9454 | 0.8952 | 0.9232 |
| United Kingdom (US$/Pound) | 1.7024 | 1.6095 | 8.1% | 1.5025 | 1.4396 | 1.5156 |