Thursday, 7 May 2015

The strong US dollar and recessions

In the past, has a sudden move towards a strong dollar been associated with recessions?  With some qualifications, the answer is "yes."

Let's start with a few graphs from XE's currency section.  First, here is the Japanese Yen vs. the dollar:

The Yen fell by over 10% before stabilizing late in the 4th quarter of 2014.

Next, here is the Euro vs. the dollar:



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