February 2011 Currency Exchange Rates

Click image for larger view

During February the U.S. dollar once again lost ground “across the board” against the other currencies we track. The largest percentage drop occurred versus the euro. On a trade-weighted index basis, the dollar depreciated 0.8 percent against a basket of 26 currencies. Interestingly, widespread social unrest around the world ordinarily drives investors to the dollar as a safe haven, but that didn’t occur last month during the revolts in Tunisia, Egypt and other countries in North Africa.
 

Click image for larger view

Canada: Strong 4Q2010 growth (3.3 percent) -- thanks to the biggest jump in exports since 2004 -- and rising oil prices helped maintain the loonie at better than parity with the U.S. dollar.

Europe: Once again, the euro’s rise against the dollar occurred despite the risks presented by the region’s sovereign debt crisis. Even a comment by Portugal’s finance minister that the country’s promise to cut its budget deficit and implement reforms might be “in vain” failed to reverse the euro’s fortunes.

Japan: The effects of rising industrial output in January and a more optimistic outlook by the Bank of Japan were very nearly offset by a resumption of the yen-funded carry trade.