The problem with currencies is that exchange rates only provide relative values. You never know if a movement depends on the appreciation of one currency or the depreciation of the other. Take the Euro / USD exchange rate. Now, there are those who say the euro area currency has strengthened. And then, there are those who say the dollar has weakened. The great thing is that both are right. As our “Graph of the Week” shows, the dollar has lost against the currencies of America's main trading partners since December 2016, and the euro has strengthened against the basket of major US currencies since April of this year. own business partners. This data is important. They suggest that, for once, currency movements are based neither on the economy nor on the interest rate differential, in other cases the determining factor.
This time it is a political question. In summary, it is the victories of Trump in the United States and of Macron that have changed investors' perceptions of Europe. That finding has implications that go beyond the flattering French vote. In many respects, the dollar remains the world's reference currency. Its strength or weakness affects the performance of global trade transactions, commodities and capital markets.
