Hello welcome to this video, and to my youtube channel.
This video is dedicated to analyzing the relative movements of the EURO and the US Dollar, and the relative movements of the US Dollar and the other Anglo-Saxon Currencies.
This analysis is performed using the indexes of each currency, which I introduced in a video that you can find here, in my youtube channel.
This figure shows the temporal evolution of the indexes that represent the performance of each currency.
These indexes are calculated using a moving average of 262 business days, corresponding to a time interval of one year.
As we saw in the previous videos, the currencies of the Anglo-Saxon countries are appreciating.
And, the most depreciating currency is the Japanese Yen, which we can see up here, in dark blue (green).
This figure summarizes what has happened in the last year, and since the 26th of October: that is, a few days before the US presidential elections.
So, we have the annual behavior, presented in green, and we can see that the most devaluated currencies are the English Pound, the Mexican Peso and the Swedish Krone.
However, in the short run, that is represented in blue, the most important devaluations are the Japanese Yen and the Mexican Peso.
Now we compare what happened since the 26th of October, represented in dark blue, with the evolution in the last 5 business days, which is presented in light blue.
What stands out from this figure is the appreciation of Anglo-Saxon currencies: the Dollar, the Pound, the Canadian Dollar, the Australian Dollar, and the Newzealand Dollar, in both time intervals.
And now let's look more closely at the currency indexes.
And let's start with the EURO.
In this figure we can see that the EURO has been slightly devaluating.
And we draw this conclusion due to the negative slope of this line, presented here in pink, which is representative of the average or long-term trend.
We also see that the current prices are below this line, and so we conclude that in the short term the EURO has the potential to recover slightly! in this figure we see that the trend of the US Dollar is of rising.
This figure also shows that the Dollar index values are above the average trend, and so they may correct, depreciating in the short term.
Regarding to the British Pound we see that there is a recent recovery, that begins to influence the the long-term trend.
However as the data are still not enough, the average trend continues to be negative In the short term we see that the index values are well above the average line and, therefore, a correction is likely to occur.
Here we see that the Canadian Dollar has a rising average trend.
However, the recent index values are well above the average trend and, therefore, a correction is likely to occur.
This figure shows that the average trend of the Australian Dollar is positive.
It also shows that, the evolution of the prices, show no signs of changing this trend.
So, in the short term the index values will remain close to do the average line.
And this figure is similar to the previous one.
The average trend of the Newzealand Dollar is positive, and the evolution of the prices show no signs of changing this trend, and in the short term the index values will remain close to the average trend.
Based on the above analysis, we will now analyze the behavior of the six currency pairs listed here.
That is: the EURO against the US Dollar, the Pound against the US Dollar, the US Dollar against the Canadian Dollar, the Australian Dollar against the US Dollar, the Australian dollar against the Canadian Dollar, and the Newzeland Dollar against the US Dollar.
In this table here we have the most recent quotations of all combinations of currencies that we have been considering.
And here below, in this smal table we summarize the conclusions that we presented earlier.
And to help in the following conclusions we are going to associate three colors to characterize the probable short-term behavior.
Thus, to signal that the EURO may recover we will associate to it the green.
To signal that the US Dollar, the British Pound and the Canadian Dollar may correct we are going to associate the read.
And since the Australian Dollar and the Newzealand Dollar will follow the average trend we will associate to them the yellow.
And here we have the evolution of the EURO against the Dollar, for one year.
What stands out, in this figure, is that the average trend is down but, in the short term the quotations can recover, because they are well below the average trend.
The recovery may not occur immediately but it is certain that the long-term decline, if maintained, will not be uniform.
So, the deviation from the equilibrium point is justified because recently, the EURO decreased more than expected, as we saw before, and the US Dollar incresed more than expected.
And now we have the Pound against the Dollar.
But, in this case the evolution of prices, by itself, does not allow us to identify any short-term trend.
The average trend of the quotes is for decreasing but, the latest ones are close to the average line.
We know that the two currencies will correct but which one will correct first? Well, we do not have enough information! And now we move to the US Dollar against the Canadian Dollar.
As in the previous case, the evolution of quotations also does not alow conclusions to be drawn about the short-term trend.
The average trend, in this case, is positive but the most recent ones are close to do average line.
We saw earlier that the two currencies will correct.
But, as before, we do not have enough information to predict which will correct first.
And we now turn to the Australian Dollar against the US Dollar.
The average trend is of growing! The most recent quotations are below the average trend and a recovery is expected.
To justify this behavior we have the stability of the Australian Dollar and the probable correction of the US Dollar.
And the case of the Australian Dollar against the Canadian Dollar is identical to the previous one.
And for the Newzealand Dollar against the US Dollar, we also use the same arguments.
But, in this case, some recovery is already observable.
And this is the end of this video! I want to thank you for your attention.
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