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

October 2, 2023 (see October 18 update below). Next update: November 2, 2023. Visit Search to look at past issues of World Currency Observer (brochure edition).

The Iceland krone fell by 5.%% in September 2023 (giving back all of its recent three-month gain against the US$), and the Mexico peso fell by nearly 2% against the US$. The Haiti gourde was up by 1% against the US$ in September 2023 (down by 16.5% from its value this time last year). Several South America currencies were down against the US$ in September, which may be connected with lowering of interest rates in these countries, which was against the worldwide trend (see below). The Euro was down by 2% in September against the US$, despite the rise in European Central Bank interest rates (see below). The UK pound was down by just over 3% in September. The Sweden krone was up by nearly 1.5%. The Poland zloty was down more than 7.5% against the US$ in September, and is up by 12% since this time last year (see below). The Belarus rouble fell by around 3.25% in September 2023, and is now down by 32% against the US$ since this time last year (the Russia rouble is down by 65% against the US$ since this time last year). The Kazakhstan som was down by 2.5% in September, and is at roughly the same level as it was this time last year (down by 25% from its value before the Covid-19 pandemic). The Israel shekel fell by 2% against the US$ in August 2023, and is down by 8% against the US$ since this time last year. Looking at north and west Africa, there is a long list of countries whose currency values against the US$ are stronger than this time last year, but the focus of world attention has been more on countries for which the opposite is true, such as Ghana, The Gambia and Nigeria (where the value of the naira was steady in September 2023). After a 12% fall in September, the São Tomé and Príncipe dobra is still up by 7% against the U$ since this time last year. The Zambia kwacha was down by 4% against the US$ in September, and is down 33% since this time last year. While they were both down by around 2.5% against the US$ in September, the Japan yen is down by more than 3% since this time last year, and the South Korea won was up by nearly 6% (a 9% strengthening of the South Korea won against the Japan yen since one year ago). The Pakistan rupee was up by 5.5% against the US$ in September. The Thailand baht was down by 5% in September (up 3.5% since this time last year.) The Laos kip down was down by 3% in September 2023, and is down by 23% against the US$ since this time last year. Because of their strong influence on rates of inflation around the world, there has been much attention on moves by Russia and Saudi Arabia to implement supply restrictions, to push oil prices up from their current level of around UD$85 per barrel to (perhaps) U$ 100 by the end of the year, but it should be noted that world oil prices are still well below the US$115 pea reached in June 2022. In contrast to the 8% increase in world oil prices in September, the US$ prices of many commodities fell in September, including a 3.5% fall in gold prices.

There has been, in September 2023, a broad distribution of exchange rate movements against the Euro by non-Euro countries in what used to be called central Europe (including Hungary, Czech Republic(Czechia), Slovakia) and the Balkan states (including Albania, North Macedonia, Romania, Serbia). Among these, the Albania lek and the Czechia koruna were up by nearly 2% against the Euro in September 2023, while the Hungary forint and the Poland zloty were down by more than 5.5%. With the exception of Turkey (which had, until recently, been pursuing a low real interest rate policy – this is now being reversed), currencies in all the Eastern Europe countries (including the above-mentioned two groups) have been up strongly against the US$ since this time last year. Also, the Euro rose by 7% over the last year against the US$. The differing currency movements among East Europe countries has been enhanced by interest rate movements, which have been diverging more in the last month, one of which was the decision of Poland to lower interest rates by 0.75% in a month when the European Central Bank moved its interest rates upward by 0.25%, (it was hinted that another upward movement in ECB rates might take place in December 2023). In Hungary, commentators attributed the September weakness in the forint to the decision not to raise local interest rates. With regard to the downward movement of the Euro against the US$ in September, the decision by the United States Fed to pause actual movements of rates was overshadowed by Fed statements which were interpreted as indications that it will pursue a higher-than-previously expected United States interest profile over the next 1 ½ years.

 Poland zlotys per 1 Euro October 2023.png

The Afghanistan currency, the afghani, has been up strongly over the last four months (including a 6.5% rise against the US$ in September, and a 12% rise against its southern neighbour’s currency, the Pakistan rupee, which is also Afghanistan’s most important export market) and also up strongly since this time last year (up 11% against the US$ and up more than 35% against the Pakistan rupee). Contributing to its strength are severe restrictions on the in-country use of the United States dollar and the Pakistan rupee, and one result is that reports almost unanimously suggest that there is no parallel market in the afghani. Reported official inflation figures for Afghanistan have been negative for the most recent three months in 2023, roughly coinciding with the accelerated appreciation of the afghani over the same period. Among the factors which offset the Afghanistan trade deficit, which has been widening in 2023 over 2022, has been a flow of humanitarian aid from a large number of countries and international bodies. The current value of the currency, at 78.5 afghanis per 1$US, is much stronger than the low point of 105 in January 2022, which was four months after the Taliban takeover on August 15 2021.

October 18, 2023 update

There has been some attention to the results of economic modelling by staff of the Coalition for a Prosperous America, which are seen as supporting the idea that a substantial increase in United States tariffs, moving away from freer trade, would boost the U.S. economy, by shifting, from foreign to United States suppliers, the production of goods needed to provide for American demand – the tariff increases modelled were not applied to countries which have free trade arrangements with the United States: Australia, Singapore, South Korea, Canada, Mexico, Chile, Columbia, Peru, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, Panama, Israel, Bahrain, Jordan, Oman and Morocco. The analysis has been viewed as background to a tariff increase proposal by former President Trump, detailed in his web site: “President Trump will impose tariffs on foreign producers through a system of universal baseline tariffs on most imported goods.- Higher tariffs will increase incrementally if other countries manipulate their currency or otherwise engage in unfair trading practices.- As tariffs on foreign countries go up, taxes on American workers, families, and businesses can come down.- Raising tariffs on foreign producers while lowering taxes for domestic producers will help keep jobs and wealth in the United States.”. Linked to this topic are monthly (Misalignment Monitor) analyses from Coalition staff, on views of which of 35 countries (the US and 34 others) have exchange rates which are overvalued/undervalued against the US dollar (and against each other) based on their current and projected current account deficits/surpluses, and how much each of the currencies would have to depreciate/appreciate, simultaneously, to achieve current account balance on each of these countries in five years.

(World Currency Observer will next be updated on November 2, 2023. 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.)