All articles tagged with #exchange rates
The US dollar is on track for its steepest annual decline since 2017, dropping 9.5% this year amid trade war fears and Federal Reserve interest rate cuts, with further weakening expected in 2026 as other central banks hold or raise rates; this has significant implications for global trade, investment, and currency markets.
The weakening of the U.S. dollar in 2025 has made European travel more expensive for Americans once they arrive, despite cheaper airfare options. Currency devaluation has increased costs for hotels, tickets, and other expenses in Europe, although lower flight prices due to increased airline competition offer some relief. Despite higher costs and economic uncertainties, U.S. travel demand remains strong, with many travelers adjusting their plans and budgets to continue exploring abroad.
The US dollar has experienced its worst start in over 50 years, dropping over 10% this year, largely due to President Trump's trade policies and increased national debt, which have shaken investor confidence and reduced the dollar's global dominance.
Japan spent a record ¥9.8 trillion ($62.2 billion) in the past month to support the yen, which had fallen to a 34-year low against the dollar, highlighting the government's determination to counter speculators and the significant effort required to influence the currency market.
Japan's Ministry of Finance confirmed its first currency intervention since 2022, spending 9.7885 trillion yen ($62.25 billion) between April 26 and May 29 to stabilize the yen after it plunged to a 34-year-low. This intervention coincided with a sharp rebound in the yen, which had been under pressure since the Bank of Japan ended its negative interest rate policy in March.
The dollar is set for its strongest week since 2022, as investors anticipate the Federal Reserve's plans to tighten monetary policy amidst rising inflation. This has led to a surge in the dollar's value against other major currencies, impacting global financial markets and exchange rates.
The Russian rouble has experienced a significant drop in value this year, losing almost 30% against the US dollar since January. Factors such as foreign currency outflows, declining trade activity, and a waning current account surplus have contributed to this depreciation. While a weak ruble has allowed the Kremlin to allocate more funds to military and social schemes, concerns remain about the currency's stability. The Bank of Russia has raised interest rates twice this year to combat the falling rouble and inflation. The rouble's current weakness poses challenges for the Russian government, including plunging export volumes and elevated consumer prices, making it harder for the average Russian to afford basic goods.
The US dollar's recent surge is causing Asian currencies to hit multi-month lows and putting pressure on the euro, leading Japan and China to defend their exchange rates. The yen has fallen nearly 8% against the dollar since mid-July, while the yuan is down over 6% since May. Signs of US economic resilience are convincing some traders that the Federal Reserve will maintain higher interest rates for longer, boosting the dollar. This has prompted Asian policymakers to take action against bearish speculators. However, skepticism remains about the effectiveness of these measures without a less hawkish Fed or an improvement in China's economy.
Nigeria's central bank allowed the naira currency to drop as much as 36% on the official market, unifying the exchange rate and scrapping the subsidy, which were the most immediate tasks that President Bola Tinubu faced. The move was well received by investors and economists, and the sovereign dollar bonds surged as much as 2.7 cents on the dollar on news of the devaluation. The local banking index earlier surged 23% to a more than 20-year high, after the suspension of the central bank governor who oversaw much-criticised multiple exchange rates.