World Currency Observer
Exchange rates around the world

Exchange Rates: one year high and low

WCO staff are on a one-month-long research visit to Central America and the Caribbean. Due in part to issues with internet connections, World Currency Observer will next be updated on February 18, 2014. Hasta luego.

January 2, 2014 (see January 21 update below)

The US$ was weaker in December against the Euro, and strengthened against the yen – the Euro finished 2013 at nearly its strongest level all year against the US$, while the yen was at its lowest 2013 level at the end of the year. The official rate for Argentina pesos per US$ rose by 10% in December–the parallel market blue dollar rate for the US$ is around 50% above the official rate (9.5 pesos/US$ versus 6.5/US$). The Syrian pound strengthened by 13% on the month. The South African rand was down on the month and at its lowest 2013 point at the end of the year. Gold prices were down by more than 25% in 2013; silver prices were down by more than 35%.

Some updates on late-December 2013 developments mentioned in WCO.

Following up on the December 2013 WCO reference to Ukrainian relations with the European Union and Russia: on December 17, the President of Russia issued a press release which said that Russia is going to invest US$15 billion of reserves from the Russia National Wealth Fund (petroleum-related revenues) in Ukrainian government securities. The announced investment program then got going on December 23, with the transfer of $3bn to the Ukrainian central bank, pursuant to the Russian purchase of an issue of Ukrainian Eurobonds (non-tradeable, 5% coupon, 2 year maturity). The President of Russia also said Gazprom and Naftogaz of Ukraine have signed a contract supplement, which will enable Gazprom to sell gas to Ukraine at the price of $268.5 per 1,000 cubic meter. He suggested that the comparable market price of gas today is about $400 (around $4/gigajoule). The timing of the decrease is likely to be January 2014, and may be worth $4 billion per year. There is widespread acknowledgement that these Russian measures have rescued the Ukraine from a forthcoming foreign exchange crisis, and also that the Ukraine had been informed that a similar bailout package would not be available from the EU nor from the International Monetary Fund.

Following up on the December 2013 WCO item on the United States, the US Federal Reserve Open Market Committee announced that, beginning in January 2014, it will reduce its bond-buying program from $85 billion to $75 billion per month (agency mortgage-backed securities at a pace of $35 billion per month rather than $40 billion per month, and longer-term Treasury securities at $40 billion per month rather than $45 billion per month; the start of so-called “tapering”.) The Fed says that it also now anticipates that it likely will maintain the current 0 to ¼ percent target range for the federal funds rate well past the time that the unemployment rate declines below 6-1/2 percent, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal.

January 21, 2014 update

After 2013, during which it declined less than other currencies against the US$, the Canadian dollar (Can$) has weakened sharply since the beginning of 2014, catching “up” to many other exchange rates.

(Next update: February 18, 2014.)