USD And World Currency Tracker (Ending July 2020)
Long Only
Seeking Alpha Analyst Since 2013
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Summary
- Euro trying to rebound despite recent stimulus announcement, another 5-6% move needed to break over its recent (2018) high.
- Yen continuing a 5-year uptrend; Pound falling, Brexit not helping.
- Aussie dollar showing strength since COVID, still well under recent highs.
- China still adamant on devaluing its currency.
- Gold is on a tear, bringing fears about holding fiat currency.
Just 8 days ago, Tuesday, July 21 2020, the EU agreed to spend €750 billion as a response to the COVID-19 crisis and economic recession (notably, almost one third is going towards fighting climate change).
However, this hasn't weakened the EUR-USD spread-- on the contrary, the currency is up ever since the announcement as the USD continues its precipitous drop since the end of March (a drop of about -9% since its peak).
EUR-USD Tracker
| EUR-USD | YOY | |||
| 1/2/20 | 1.117 | 1/1/19 | 1.134 | -1.5% |
| 2/2/20 | 1.109 | 2/1/19 | 1.123 | -1.2% |
| 3/1/20 | 1.105 | 3/1/19 | 1.123 | -1.6% |
| 4/1/20 | 1.095 | 4/1/19 | 1.122 | -2.4% |
| 5/1/20 | 1.097 | 5/1/19 | 1.117 | -1.8% |
| 6/1/20 | 1.113 | 6/2/19 | 1.137 | -2.1% |
| 7/1/20 | 1.125 | 7/1/19 | 1.107 | 1.6% |
| 7/28/20 | 1.172 | |||
| YTD | 4.9% |
Long term context: The peak for EUR-USD was 1973 at about 1.825; the low was 1985 at about 0.0669. A more recent high was March 2008 at about 1.578; most recent low was December 2016 at about 1.051.
The EUR (1.172) is in a recent uptrend since April of this year, but is still well below the recent downtrend against the USD that started in the beginning of 2018 (~1.245), needing a continued move of about +5-6% to cross that threshold.
USD-JPY Tracker
| USD-JPY | YOY | |||
| 1/2/20 | 108.36 | 1/1/19 | 108.87 | -0.5% |
| 2/2/20 | 107.5 | 2/1/19 | 111.37 | -3.5% |
| 3/1/20 | 107.47 | 3/1/19 | 110.95 | -3.1% |
| 4/1/20 | 107.26 | 4/1/19 | 111.41 | -3.7% |
| 5/1/20 | 107.7 | 5/1/19 | 108.26 | -0.5% |
| 6/1/20 | 107.98 | 6/2/19 | 108.38 | -0.4% |
| 7/1/20 | 107.08 | 7/1/19 | 108.74 | -1.5% |
| 7/28/20 | 105.09 | |||
| YTD | -3.0% |
Long term context: The peak for USD-JPY was 1971 at about 357.40; the low was January 2016 at about 76.19. A more recent high was May 2015 at about 124.11; most recent low was in September 2016 at about 101.33.
The USD (105.09) has seen a steady decline since late 2016, after a sharp move up after September 2016. If the USD weakens a few points below its current price, it may point to a longer term devaluation against JPY.
GBP-USD Tracker
| GBP-USD | YOY | |||
| 1/2/20 | 1.321 | 1/1/19 | 1.31 | 0.8% |
| 2/2/20 | 1.281 | 2/1/19 | 1.326 | -3.4% |
| 3/1/20 | 1.241 | 3/1/19 | 1.302 | -4.7% |
| 4/1/20 | 1.258 | 4/1/19 | 1.303 | -3.5% |
| 5/1/20 | 1.234 | 5/1/19 | 1.263 | -2.3% |
| 6/1/20 | 1.239 | 6/2/19 | 1.27 | -2.4% |
| 7/1/20 | 1.298 | 7/1/19 | 1.216 | 6.7% |
| 7/28/20 | 1.298 | |||
| YTD | -1.7% |
Long term context: The peak for GBP-USD was 1957 at about 2.859; the low was 1985 at about 1.079. A more recent high was September 2007 at about 2.081; most recent low was July 2019 at about 1.216.
As the GBP-USD (1.298) is approaching its recent low, doubts about the strength of the country's economy and global competitive position are amplified by the Brexit fallout and now COVID-19.
AUD-USD Tracker
| AUD-USD | YOY | |||
| 1/2/20 | 0.669 | 1/1/19 | 0.727 | -8.0% |
| 2/2/20 | 0.651 | 2/1/19 | 0.709 | -8.2% |
| 3/1/20 | 0.614 | 3/1/19 | 0.712 | -13.8% |
| 4/1/20 | 0.649 | 4/1/19 | 0.705 | -7.9% |
| 5/1/20 | 0.666 | 5/1/19 | 0.694 | -4.0% |
| 6/1/20 | 0.69 | 6/2/19 | 0.703 | -1.8% |
| 7/1/20 | 0.718 | 7/1/19 | 0.684 | 5.0% |
| 7/28/20 | 0.718 | |||
| YTD | 7.3% |
Long term context: The peak for AUD-USD was 1974 at about 1.488; the low was 2001 at about 0.485. A more recent high was July 2011 at about 1.099; most recent low was March 2020 at about 0.614.
Though the AUD (0.718) showed strength from 2015-2017, the currency experienced a strong downtrend since its recent high in 2011. However, it has bounced nicely from its March 2020 low and is showing increasing strength since, similar to EUR-USD in the same time period.
USD-CNY Tracker
| USD-CNY | YOY | |||
| 1/2/20 | 6.998 | 1/1/19 | 6.708 | 4.3% |
| 2/3/20 | 6.974 | 2/1/19 | 6.703 | 4.0% |
| 3/2/20 | 7.09 | 3/1/19 | 6.722 | 5.5% |
| 4/1/20 | 7.091 | 4/1/19 | 6.736 | 5.3% |
| 5/1/20 | 7.132 | 5/1/19 | 6.936 | 2.8% |
| 6/1/20 | 7.069 | 6/3/19 | 6.868 | 2.9% |
| 7/1/20 | 7.005 | 7/1/19 | 6.908 | 1.4% |
| 7/28/20 | 7.005 | |||
| YTD | 0.1% |
Long term context: The peak for USD-CNY was 1994 at about 8.690; the low was 1981 at about 1.590. A more recent high was August 2019 at about 7.161; most recent low was January 2014 at about 6.034.
The USD (7.005) continues to show strength against the devaluing CNY, and has been on a steady uptrend since its recent low in January 2014. Dueling factors such as China's high government spending and higher US crude exports have contributed to this longer term (5 year) secular trend.
XAU-USD Tracker
| XAU-USD | YOY | |||
| 1/2/20 | $1,586.35 | 1/1/19 | $1,320.56 | 20.1% |
| 2/3/20 | $1,584.74 | 2/1/19 | $1,312.66 | 20.7% |
| 3/2/20 | $1,571.05 | 3/1/19 | $1,291.90 | 21.6% |
| 4/1/20 | $1,680.09 | 4/1/19 | $1,283.35 | 30.9% |
| 5/1/20 | $1,726.30 | 5/1/19 | $1,305.25 | 32.3% |
| 6/1/20 | $1,784.25 | 6/3/19 | $1,409.10 | 26.6% |
| 7/1/20 | $1,953.55 | 7/1/19 | $1,413.55 | 38.2% |
| 7/28/20 | $1,955.20 | |||
| YTD | 23.3% |
Long term context: The peak for XAU-USD is the most recent $1,955.20 at the close (July 28, 2020); the low (100-year history) was 1915 at about $19.25. A more recent high was is its latest all-time high closing price at $1,955.20; most recent low was December 2015 at about $1,060.91.
Gold ($1,955.20) has been on a tear since its latest 2015 low, and the price has really taken off since the start of COVID-19. June 2020 was a particularly strong month for Gold, which posted 38.2% YOY growth at the end of the month.
Investor Takeaway
Secular trends in currencies can help investors with the global positioning of their portfolios, as well as appraise the attractiveness of stocks, bonds, or hedges. These can also provide great opportunities in certain stocks for the investor, such as (for example) commodity mining companies and exporters to the EU and Japan.
For more stock research and recommendations based on using the latest prevalent financial statistics to find companies that can radically compound returns through growing dividends, particularly when trading at discounted prices, subscribe to: The Sather Research eLetter.
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