Forex Power Rankings: Week of March 2, 2023

‘Business as usual,’ might be easy to infer from this week’s rankings after quickly noting USD in the top spot and JPY at the bottom. However, the euro has traded in the green against most major pairs, and the Australian dollar has continued to look vulnerable losing ground once again.

Performance of individual currencies USD, EUR, JPY, GBP, CHF, CAD, and AUD in all their pair combinations against each other is measured and weighted equally when deriving the week-over-week net change found below; currencies are then ranked on their overall percentage net change.

1. USD (+0.8%)

US dollars gained ground on every major pair except for EUR in the last week of trading as projections for US interest rates edge higher on greater inflation fears in the US than abroad. The greatest USD performance came at the expense of Japanese yen.

2. EUR (+0.7%)

For a week that some could summarize as being broadly bullish USD, the euro held its own appreciating against other major currencies like GBP, JPY, and AUD. EUR/GBP in particular has moved back near highs for the last year of trading.

3. CAD (+0.3%)

Canadian dollars were able to stay positive against the average major currency even though CAD lost more ground to USD this week. The Australian dollar’s continued decline aided the Canadian currency as AUD/CAD fell back below 0.92.

4. GBP (+0.1%)

British pounds stayed mostly unchanged this week – losing some ground to USD and EUR while making it up against JPY and AUD. GBP, however, has become the weaker of the two when compared to the highly-correlated EUR.

5. CHF (-0.4%)

Swiss franc depreciated against most major currencies, albeit only slightly. Though the losses were relatively minuscule, CHF has become the weakest of the major European currencies losing value to both EUR and GBP.

6. AUD (-0.5%)

Though there’s plenty going on in Australia leading into next week’s rate decision, AUD’s high correlation to Chinese stocks seems to be having a negative effect. For the moment, it appears as though Aussie dollar is trending with the overall equity market making losses indiscriminately over the last week.

7. JPY (-1.0%)

Japanese yen fell in exchange rate to every major currency on the board as the bullish run JPY took to start 2023 seems to be fading. The yen couldn’t even muster gains against the vulnerable AUD. Worries of continued low interest rates in Japan are not helping the currency.