Line chart tracks trading regimes for euro, yen, and pound versus the dollar.
Left Y-axis: Yen per dollar (LHS); Right y-axis: Dollar/euro and pound (RHS, reverse scale); x-axis: 2018 – 2022
- Dollars per euro begin the period near 1.2 (Jan 2018) and end it at 1.11 (end of Q1 2022).
- Dollars per pound were near 1.4 (Jan 2018) and were at about 1.31 (end of Q1 2022).
- Yen per dollar changes from just over 112 (January 2018) to 121.7 (end of Q1 2022).
Dollar weak/strong points:
- Dollars per euro: near 1.25 (Q1 2018); near 1.1 (Q1 2020)
- Dollars per pound: near 1.4 (April 2018); near 1.2 (Q1 2020)
- Yen per dollar: over 114 (October 2018); near 103 (Q1 2020)
Sources: Bloomberg and Wells Fargo Investment Institute. Daily data from January 1, 2018 to March 31, 2022.
- Wider growth and monetary policy differentials with the U.S. (both likely exacerbated by Russia’s action in Ukraine) should continue to weigh on the euro in the first half of 2022. The euro may struggle to gain significantly until some geopolitical stability returns.
- The yen may stay weak as Japan is acutely vulnerable to higher fuel prices. The pound may also suffer from stagflationary impacts of higher energy prices and a broader European slowdown.