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How Did the Euro Trade in 2008?
one year ago, the Euro was trading at approximately 1.47 against the US
dollar, 5 percent higher than current levels. In 2008, this type of
move is considered mild especially when compared to the Euro’s 20
percent rally against the British pound and New Zealand dollar and 27
percent decline against the Japanese Yen. However the mild year over
year change in the EUR/USD masks a tremendous amount of volatility
during the year. In the first half of 2008, the EUR/USD soared to a
record high above 1.60. After that, it fell 22 percent to a 2 year low
but recovered more than half of those losses in the month of December.
How Did the Japanese Yen Trade in 2008?
global economic turmoil and the subsequent unwinding of carry trades
made the Japanese Yen, the best performing currency of 2008. The Yen
rose more than 35 percent against the British pound, Australian and New
Zealand dollars and hit a 13-year high against the US dollar. Unlike
some of the other currencies, which may have seen wild swings
throughout 2008, the Yen consistently strength throughout the year.
Unfortunately the remarkable rally in the Yen will also be a big reason
why Japan could underperform, its peers next year.
How Did the British Pound Trade in 2008?
British pound was one of the worst performing currencies in 2008. It
fell to a 6 year low against the US dollar and record low against the
Euro in addition to selling off against every other G10 currency. The
overwhelming weakness in the currency is a direct reflection of the
impact that the credit crisis had on the UK economy. In the month of
December, many currencies recovered against the US dollar, but
unfortunately the British pound was not one of them. Although the
pound could continue to weaken in the first quarter, the government’s
aggressive fiscal and monetary stimulus should help the country recover
towards the end of 2009.
How Did the Dollar Trade in 2008?
It has been an exceptionally active year in the foreign exchange market
as currency volatilities hit record highs. In the first half of the
year, everyone was worried about how much further the dollar would fall
but in the second half of the year the concern became how much further
the dollar would rise. After hitting a record low against the Euro in
the second quarter, in the beginning of the fourth quarter, the US
dollar actually surged to a 2 year high. From trough to peak, the
dollar index rose more than 23 percent in 2008.
The so called "green shoots" seen this spring have emerged as "less
bad" data show the economic decline has clearly slowed its descent.
April saw the stock market move sideways, consolidating a 30% gain off
the recent market lows, even as the 10-year and 30-year Treasury yields
surged above 3% and 4% respectively.
Possible risks and profits to be made can always be predicted if
traders would only have more accurate Forex forecast to base their
trade and decisions upon. Forex forecasts are only one way of keeping
up with the volatile Forex market. Success will depend the most in
knowing what and who will affect the rate changes.
May 27 (Bloomberg) -- The U.S. recession will probably end
in the third quarter, a survey of business economists showed,
even as rising joblessness indicates the recovery will be weaker
than previously estimated.