The dollar’s trade-weighted value has slipped in recent weeks. The Major Currency Index is down more than 4% and the Broad Dollar Index more than 2% since their peaks in late November. Depreciation against the British pound and the Canadian dollar has been consistent with the two indexes, but the U.S. dollar has continued to appreciate against the yen as the outlook for the Japanese economy seemed to soften a bit. More dramatic has been the dollar’s change relative to the euro, which has appreciated 10.4% against the dollar since its October low of 0.827. Changing expectations about U.S. economic growth and financial market performance are said to be largely responsible for the dollar’s depreciation.
Suggested citation: "International Developments," Federal Reserve Bank of Cleveland, Economic Trends, no. 01-01, pp. 06, 01.01.2001.