Yen Loses Ground to Euro, Franc, and More

Another week and another decline in Japanese yen. JPY depreciated against most major currencies over the last week, but it especially gave up ground to Swiss franc and euro. The Swiss franc, on the other hand, has sneakily rallied to prominence as USD/CHF traded through multi-year lows this week. Interest rates continue to dictate relative strength in these forex markets, making it tougher for markets like JPY whose rates are near 0% and easier for the EURs and CHFs of the world with their more hawkish environments.

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.

Trend followers might trade in the direction of recent strength or weakness, while contrarians could trade against the trend, For example, trend followers tend to buy the strongest currency, and contrarians tend to sell it.

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1. Swiss Franc - CHF (+1.3%)

Last week's ranking: #1 (+0.8%)

Under the radar, Swiss franc has appreciated to historically high levels against several major currencies including the US dollar and Japanese yen. USD/CHF moved down below 0.90 for the first time in over a year, and CHF/JPY is closing in on 150 - a level the pair hasn't reached in almost a decade.

3. Euro - EUR (+0.4%)

Last week's ranking: #5 (-0.1%)

Euro has broken through 1.10 against the US dollar in a relatively calm manner - showing little volatility amid trading beyond highs for the last year of trading. Is this simply a calculated reversion to the longer-term mean closer to 1.25 or the calm before another bearish storm for the euro?

4. Canadian Dollar - CAD (+0.2%)

Last week's ranking: #4 (0.0%)

Canadian dollar isn't losing ground, but it certainly isn't gaining any ground either. USD/CAD moved away from its highs a few months ago giving CAD some breathing room, but the market has been relatively flat ever since that short bullish window.

5. British Pound - GBP (-0.3%)

Last week's ranking: #3 (+0.3%)

It's hard to call the British pound a loser at this stage given that it has rallied up to 1.25 against the US dollar and stayed there, but GBP has become the weakest of the major European currencies - EUR and CHF - over the last week of trading.

6. US Dollar - USD (-0.9%)

Last week's ranking: #6 (-0.5%)

The tide continues to turn on USD as the dollar loses ground to pretty much ever major currency market except yen. US dollars are now either at or close to lows against GBP, EUR, and CHF. Can USD bounce back? Or will Canadian and Australian dollars be the next currencies to start beating up on the US dollar?

7. Japanese Yen - JPY (-1.6%)

Last week's ranking: #2 (+0.3%)

It seems to be one step forward and three steps back for Japanese yen these days as the market has not been able to turn any of the US dollar weakness into substantial gains. JPY is trading near lows against currencies like GBP, EUR, and CHF and midrange against the weaker currencies like USD and CAD. Will the yen ever make a meaningful comeback?