July 2, 2018 — World Currencies Rally Against the US Dollar


As speculators increased bullish bets on the US dollar last week, many foreign currencies gained value against the greenback Friday.   The Euro jumped against the US dollar Friday as leaders reached a deal on migration.  The Euro gained the most in a month and Italian government bonds rose when European Union leaders agreed to measures to slow down the flow of migrants, alleviating concerns over a standoff between Italy and the rest of the Union.

The British pound rose after Britain’s Q1 economic growth raised hopes of monetary policy tightening in the coming months.  The Mexican peso hit a one-month high ahead of the presidential election, and the Canadian dollar strengthened after a surprise expansion of the domestic economy in April, raising expectations for a Bank of Canada interest rate hike in July.

Positive news for the US dollar came as the Chinese yuan experienced its biggest monthly fall on record as worries arose about the effects a Chinese-US trade war could have on the world’s second biggest economy.

If you are holding foreign denominated debt or currencies, it is important to review your holdings regularly.  We can help you assess your global risks, set up a hedge program to protect against rising interest rates, while identifying foreign exchange exposures and their timing to design a custom risk management solution.