And just like that, we're one quarter into the year already! I think it's time we take a look back and see how the forex markets performed in Q1 2012!
Below is a chart of 7 major currencies and how they fared against the U.S. dollar over the past three months:
Interestingly, all the high-yielding currencies posted decent gains versus the dollar, with the New Zealand dollar leading the way with an impressive 5.18% gain. The risk-on environment in Q1 2012 gave the comdolls plenty of room to rise, as the Australian and Canadian dollars were able to post gains against the safe haven Greenback as well.
Also notable is how the Swiss franc managed to appreciate 4.13% against the dollar despite the Swiss National Bank (SNB)'s commitment to weaken the franc. But then again, the SNB was never as concerned about USD/CHF as it was about EUR/CHF, the pair that the central bank bases most of its decisions on.
The British pound was also able to seal a solid performance by rallying late in March to end with a 3.18% gain. And right on its heels was the euro, which was actually quite resilient last quarter. I mean, who would've thought that it would gain 3.16% amidst all that Greek debt drama?
Surprisingly enough, EUR/USD stayed above 1.3000 throughout February and March, even though only 11 out of 49 surveyed banks believed that the pair would stay above that level back in January.
Meanwhile, the yen ended up being the biggest loser, dropping a solid 7.20%. This is quite strange, because if you read my January 2012 Currency Performance post, you'd remember that the yen was actually the top dog for the month of January.
Of course, this is great news for our friends over at the Bank of Japan, which has done everything under its power to depreciate the yen. Looks like they found the yen's weakness after all, eh? And all it took was one monetary policy statement!
That about wraps up our roundup of the Q1 2012 currency performance. Tomorrow, I'll share something I'm sure you'll all be interested in - the big banks' predictions for Q2 2012! Don't miss these hot forecasts, forex folks!