For US major trade partners, a mixed bag on their costs for the dollar …

The top twelve destinations for U.S. exports are Canada, Mexico, China, Japan, Great Britain, France, Germany, Belgium, South Korea, Norway, Brazil, and Taiwan. There has been a mixed bag in terms of increases or decreases in each country’s cost of the US dollar since the beginning of 2021. Using currency data from OANDA, we identified the rate changes between 1 January 2021 and 18 March 2021.

Currency pair1 January 202118 March 2021Percentage change
USD/CAD1.27411.2450-2.3
USD/MXN19.883320.59713.6
USD/CNY6.52776.5006-0.4
USD/JPY103.1600109.07005.7
USD/GBP0.73250.7189-1.9
USD/EUR(1)0.81530.83882.9
USD/KRW1,086.10001,128.13003.9
USD/NOK8.54548.4699-0.9
USD/BRL5.19165.62088.2
USD/TWD28.077228.27240.7
Source: OANDA

(1) France, Germany, and Belgium use the euro as their currency. We refer to them collectively as the Eurozone.

Since January, countries seeing their currencies significantly strengthen against the dollar are Canada and Great Britain. On the other hand, Mexico, Japan, the Eurozone, South Korea, and Brazil have seen their currencies significantly weaken, making their cost to import U.S. product more expensive.

The primary mover of currency rates is supply and demand. The increased price of the dollar could be a result of this basic economic principal. Changes in bond yields may also have an impact on currency pricing as well as changes in policy rates imposed on banks due to their central banks’ policy initiatives.

During the same period in 2020, with the exception of Japan, all other top US trading partners saw their costs for US exports increase as shown in the following table:

Currency pair1 January 202018 March 2020Percentage change
USD/CAD1.30161.41008.3
USD/MXN18.906422.826620.7
USD/CNY6.96687.00480.4
USD/JPY108.6300106.9900-1.5
USD/GBP0.75830.82318.5
USD/EUR0.89150.90351.3
USD/KRW1,154.56001,240.10007.4
USD/NOK8.790610.357317.8
USD/BRL4.01635.006924.7
USD/TWD29.953130.21870.9
Source: OANDA

The shut downs around the globe due to the pandemic we believe may be the significant factor behind the changes in direction of these currency pairs.

18 March 2021 11:58 am EST

Interbank market news scan: Can central banks play social justice warrior? Are traders prepared for a rate increase?

Banks now tackle diverse issues, be it Covid-19, climate change or inequality. Purists may disagree but there’s no other option. Central banks aren’t what they used to be – and the better for it | Business | The Guardian

After standing shoulder-to-shoulder for much of the pandemic, traders are preparing for the day the world’s central banks begin to move apart on policy. Traders Map Out Day When Central Banks Finally Raise Rates (msn.com)

Lawmakers in Brazil vote to grant their central bank autonomy. Brazil passes law giving autonomy to central bank | Financial Times (ft.com)

A top Bank of Canada official called the recent spike in cryptocurrency prices “speculative mania,” and said such assets don’t have the qualities to become the money of the future. Crypto Boom Is ‘Speculative Mania,’ Bank of Canada Deputy Says (msn.com)

Sudan’s new cabinet faces pressure to push through rapid currency reform or risk endangering its path to debt relief and to international financial support for its shaky political transition, diplomats and analysts say. Analysis: Delay in currency reform puts donor support for Sudan at risk | Reuters

Currency pairsExchange Rate as of 4:15 pm 8 February 2021(1) As of 3:31 am EST Exchange Rate as of 11 February 2021(2)
AUD/USD0.7656 0.7744
USD/CAD1.2781 1.2676
USD/CNY6.4664 6.4557
EUR/USD1.2035 1.2124
USD/INR72.8500 72.7700
GBP/USD1.3714 1.3830
USD/JPY105.4400 104.5800
USD/MXN20.1300 19.9970
USD/DKK6.1785 6.1332
USD/NOK8.5428 8.4650
Sources: (1) Federal Reserve, (2) Reuters

Interbank market news scan as of 12:42 pm AST: central banks, cryptocurrencies, foreign exchange

Currency pairsFederal Reserve as of 25 January 2021Reuters as of 25 January 2021Reuters as of 26 January 2021 
AUD/USD0.77280.77130.7754 
USD/CAD1.27111.27511.2695 
USD/CNY6.48106.47846.4636 
EUR/USD1.21791.21381.2166 
USD/INR72.980072.954572.8814 
GBP/USD1.36851.36641.3733 
USD/JPY103.7600103.7600103.7700 
USD/MXN19.925020.110120.0006 
USD/DKK6.10816.12666.1245 
USD/NOK8.48208.54188.5475 
Sources: Federal Reserve, Reuters

The dollar’s strength continues to vary since our post yesterday.  The dollar weakened against the Australian dollar, the Canadian dollar, and the Chinese yuan.  The dollar also weakened against the British pound and the Mexican peso.  It continues to trade flat against the Japanese yen.

In other news …

Bank Indonesia will continue to maintain loose monetary policy until such signs emerge, given that inflation is currently under control, says Perry Warjiyo, the central bank’s governor. Indonesia may see signs of inflation pressure in fourth quarter of 2021: Central bank governor (msn.com)

Brazil‘s central bank does not expect to raise interest rates in the immediate future because of an unusually high degree of economic uncertainty, minutes from its last policy meeting showed on Tuesday, although fiscal risks could prompt it to tighten policy faster than its baseline scenario suggests. Brazil central bank unlikely to raise rates now as economy sputters, minutes show | Nasdaq

Nigeria’s central bank held its benchmark lending rate at 11.5% on Tuesday, governor Godwin Emefiele said at its first interest rate meeting of 2021. Nigeria’s central bank holds benchmark lending rate at 11.5% | Reuters

China’s central bank won’t exit “prematurely” from its supportive monetary policies while at the same time keeping debt risks under control, Governor Yi Gang said. China Central Bank Won’t Exit Prematurely From Stimulus, Yi Says – Bloomberg

No existing cryptocurrency has a structure that is likely to allow it to work as a means of payment over the long term, Bank of England Governor Andrew Bailey told an online forum hosted by the Davos-based World Economic Forum on Monday. Current cryptocurrencies unlikely to last, Bank of England governor says | Reuters

Interbank market news scan at 11:38 am AST. Latest on central banks and forex.

Investors may take Janet Yellen’s expected endorsement of a market-driven exchange rate as an additional green light for the U.S. currency’s long-term downtrend. Dollar Shorts Mount Before Yellen Outlines Market-Based Policy – Bloomberg

Gold edged up, recovering from an almost seven-week low, amid caution in markets as investors assessed the outlook for the dollar and the timeline for a U.S. stimulus package. Gold Edges Up From December Low With Focus on Stimulus, Dollar – Bloomberg

Oil futures edged lower as the dollar rose, while physical crude prices in Asia continued to weaken. Oil Near $52 With Virus Still Surging and Dollar Strengthening – Bloomberg

Five of six rate setters at the Bank of Israel voted to keep the benchmark interest rate at 0.1% on Jan. 4, minutes of the discussions showed on Monday. Five of six Bank of Israel MPC members voted to keep rate at 0.1%, minutes show | Reuters

The European Union needs a “masterplan” to move euro financial services from London to the bloc if it wants to expand the single currency’s role in a global economy dominated by the U.S. dollar, a senior EU lawmaker said on Monday. Markus Ferber, a senior member of the European Parliament, said if the EU wants to compete with the greenback, it needs a financial system to match it. EU needs ‘masterplan’ to grab euro finance from London | Reuters

Brazil’s central bank is poised to hold its benchmark rate steady again on Wednesday but will likely emphasize the need for policy normalization in response to quickly developing inflation pressures, a Reuters poll showed. Brazil central bank to hold rates this week, stress policy normalization | Regina Leader Post

Foreign exchange rates between U.S. and countries of interest to Baltimore …

As of 12:41 am EST, 2 November 2020:

1 CNY (China) = 0.14920 USD     1 USD = 6.68307 CNY

1 EUR (Belgium, Finland, Italy) = 1.16430 USD     1 USD = .85819 EUR

1 DKK (Denmark) =6.883 USD   1 USD= 0.15636 DKK

1 NGN (Nigeria) = 0.00262 USD   1 USD= 380.640 NGN

1 INR (India) = 0.01341 USD    1 USD = 74.3380 INR

1 JMD (Jamaica) = 0.00679 USD    1USD = 144.248 JMD

1 BRL (Brazil) = 0.17407 USD    1 USD = 5.73989 BRL

1 XCD (Eastern Caribbean) = 0.37037 USD    1 USD= 2.70 XCD

Source: Bankrate

Foreign exchange rates between U.S. and countries with diplomatic presence in Atlanta, Georgia

As of 10:22 pm EST, 28 October 2020, here is the price of the U.S. Dollar in foreign currency of interest:

1 EUR= 1.17556 USD   1 USD= .85056 EUR

1 XCD (Eastern Caribbean) = 0.37037 USD  1 USD= 2.70 XCD

*1 CHD (Canada)= 0.75430 USD  1 USD= 1.32555 CHD

*1 CHF (Switzerland)= 1.09853 USD   1 USD= 0.91014 CHF

*1 ISL (Israel)= 0.29366 USD     1 USD = 3.38572 ISL

*1 ARS (Argentina)= 0.01277 USD    1 USD = 78.2977 ARS

*1 BSD (The Bahamas) = 1.00 USD   1 USD = 1 BSD

*1 ECS (Ecuador)= 0.00004 USD    1 USD = 24,094 ECS

*1 BRL (Brazil)= 0.17464 USD   1 USD = 5.72242 BRL

*1 KRW (South Korea) = 0.00088 USD   1 USD = 1132.29 KRW

*1 HTG (Haiti)= 0.01576 USD   1 USD = 61.7696 HTG

*1 LRD (Liberia) = 0.00536 USD   1 USD = 186.687 LRD

*1 MXN (Mexico) = 0.04722 USD     1 USD = 21.1694 MXN

*1 JPY (Japan) = 0.00959 USD   1 USD = 104.30 JPY

*1 JMD (Jamaica) = 0.00678 USD   1 USD = 144.408  JMD

Source: Bankrate