Headline for .     Since the beginning of 2018, despite the Covid-19 pandemic, currencies around the world are generally down against the United States dollar.     
World Currency Observer
World Currency Observer

Exchange Rates: one year high and low

May 1, 2024 (see May 14 update below). Next updates: May 28 and June 3, 2024. Visit Search to look at past issues of World Currency Observer (brochure edition).

April 2024 was quite a month for the United States dollar against other world currencies - indices of the value of the US$ against groups of currencies which WCO has seen indicate that the strengthening of the US$ in April (generally attributed to an expectation that high U.S. interest rates will continue longer than the previous predictions in the earlier part of 2024) began in the second week of the month, although there were exceptions, as identified by the WCO monthly review of individual currencies. One can start with the 3% net decline in the Mexico peso against the US$ over the whole of April 2024, and this was after taking into account a sharp rise in peso in the first week of April (the Mexico peso is still up by 5% against the US$ since this time last year.) In South America, the Chile peso (the world’s leading copper producer, at a moment when copper prices are showing strength-see below) was up by 4% in April 2024 against the US$, although the peso is down by 18% since this time last year. The Colombia peso was down by 1% on the month, and up by 16% since this time last year against the US$. The Euro was down by 1% in April against the US$, and is down by nearly 3.5% since this time last year. The Norway krone was up by nearly 2.5% in April 2024, and is down by 4% since this time last year against the US$. The Sweden krona is down by 7% against the US$ since this time last year - down 4% against the Euro over the same period. The Poland zloty is down by 1.5% against the US$ in April, and is up by 3% since this time last year. The Armenia dram rose by a further 2% against the US$ in April 2024 after a 2% rise in March. The Russia rouble is down by 1.5% against the US$ in April, and is down by 15% against the US$ since this time last year. The Kazakhstan tenge was up by nearly 2% against the US$ in April, and is up by more than 3% since this time last year. The Egypt pound fell by around 1.3% against the US$ in April (the first full month since the pound was floated in March 2024-see the March 2024 WCO). The Israel shekel was down by 3% in April against the US$, after falling nearly 2% against the US$ in March - the shekel is around 3.5% stronger than the low it reached at time of the invasion of October 2023. During a month of sharp appreciation followed by a sharp decline, the Nigeria naira showed a net upward movement of around 7% against the US$ over the entire month of April, and is up by around 10% from its value when the free market in the currency began in February 2024. The Ghana cedi was down by 3% against the US$ in April 2024. In April 2024, the South Africa rand went up against the US$, then down, and then up again (with a 5% gap between the highest and lowest values on the month), and the result was that US$ value of the rand showed almost not net movement on the month. The Kenya shilling was down by 2% in April 2024, and is up by 1.5% against the US$ since this time last year. The Uganda shilling was up by 2% against the US$ in April 2024. There was weakness in a wide range of currencies in the Pacific Rim of Asia, against the US$ in April 2024, with many down by 2% or more - the Japan yen showed the most weakness, however, down by more than 4% (there are reports of strong foreign exchange market intervention by the Bank of Japan in support of the yen), and is down by 16% against the US$ over the previous year. And, the China yuan showed almost no net change against the US$ in April. India had no net change in the value of the rupee in April 2024 against the US$, and was down by 2% since this time last year. Among commodities, cocoa prices continued, in April 2024, to rise sharply, and are up nearly 250% since this time last year (a year-over-year movement which far exceeds that of other commodities, whose year-over-year movements at the beginning of May 2024 are, at a maximum, in the 20% range for those whose prices have risen - commodities registering year-over-year declines include a number of agricultural commodities). Gold and silver prices reached record highs in April 2024, but fell in the last week of the month. Copper prices received a great deal of attention - after rising by nearly 12.5% in April 2024, they are up by 16% since this time last year. Oil prices were up by 3%% in April 2024 and, after a 4% rise in March, they are up by 11% since this time last year.

May 14, 2024 update

In the history of the general terminology of non-floating foreign exchange markets, common usage often distinguishes among: the official exchange rate, which is the rate at which the government buys and sells (and where foreign exchange is not always available); and the parallel market (the free market), offering the “true” exchange rate (where foreign exchange is always more expensive, and sometimes far different, than the official rate), which reflects the real supply and demand for foreign exchange, with non-bank financial institutions (foreign exchange dealers) as major players, sometimes with a slightly illegal tinge. In between the official and the parallel markets are foreign exchange services and products offered by banking institutions, connected to products such as export financing and credit cards. This framework is useful as a launching point for understanding episodes such as that which occurred in March and April 2024 with regard to the Nigeria naira, where the “official rate” is based on participants in the investment and export/import sectors (yielding what Nigeria refers to as the official exchange rate); and the parallel exchange rate, which is generated by supply and demand from all sectors and structures. In the above terminology of “typical” non-floating foreign exchange markets, both of these foreign exchange sectors in Nigeria would be considered official – for example, the Nigeria central bank undertakes foreign exchange intervention in both markets, and there is no particular reason why one foreign exchange rate should always be below the other one. What appears to have happened in March and April 2024 was that central bank, it is said, sold foreign exchange into the parallel market through the Nigeria bureau de change (cambio) network at an exchange rate which was fewer naira per US$ than in the official (investors and exporters) market. As the official investors and exporters window exchange rate was more expensive, this created an opportunity for participants in the parallel market to buy US dollars, and then to sell them (at a low rate) in the official market. Looking at the published foreign exchange rates for the official market for March and April, this had the effect of strengthening the naira against the US$ in March and the first two weeks of April (from around1700/1$US to 1150, a 30% appreciation). Since the 1150 low reached on April 15, the naira/1$US exchange rate has weakened to 1450 (many factors are cited, with no clear conclusion as to which were the most important), and 1450/1$US is not far from the 1480 level it was at the beginning of February 2024 (although still substantially weaker than the 950 rate at beginning of 2024). (It is also of interest to note that there is another set of Nigeria exchange rates, which are those used for converting US dollars and other foreign currency into Naira to pay for credit card transactions, and these exchange rates are at about 1/3 of the official foreign exchange rates.)

(World Currency Observer will next be updated on May 28 and June 3, 2024. Visit Search to look at past issues of World Currency Observer (brochure edition). For permission-to-quote enquiries, e-mail World Currency Observer at WCO@briargreen.com.)