My 2 cents on USD

There has been recent commentary on the drop in the U.S. Dollar. Typically, moves in the dollar are measured by an index of developed country currencies such as The U.S. Dollar Index (USDX, ticker DXY). The dollar, measured by this index, is down 2.83% YTD and down 8.90% from the March 20 high.

The top panel highlights the moves of four developed currencies, the Euro, Yen, Aussie $, and British Pound. These exchange rates vs. the USD are normalized to year-end and show all but the pound higher today compared with year-end and strong increases in July.

However, the lower panel shows four emerging currencies vs the USD, the Chinese Renminbi, Russian Ruble, Turkish Lira, and South African Rand. All four exchange rates are below year-end and with mixed results so far in July.

Many factors influence exchange rates and because they are paired with another currency, the factors are relative to the other country. Economic, geopolitical, interest rates, and now even COVID-19 may be influencing currency movements.