FX rate for last 10 years against USD 21-Dec-2014

As you know, Russian Ruble (RUB) has massively dropped in its value against other major currencies, particularly against USD,  since the Crimea issue and crude oil price plunged.

This RUB dropping is one of topics in the latest FX market, however other major currencies have been under the trend reversal for last ten years over the Lehman crisis.


1. Currencies down around 50% for last 10 years

< Figure I >

 The chart on the right describes the change rate of USD value per each currency value per since Dec 2004. RUB value has gone down to less than half of the value at 2004, and South African Rand (ZAR) value has also dropped around half of the value at 2004.



2. Brazilian real

< Figure II >

BRLUSD have changed only 1.1% from 2004, but the current value has gone down 42% from maximum value in last 10 years. BRLUSD at Dec 2011 was around 0.5358 and BRLUSD at Dec 2014 is around 0.3743.

If you bought 3yr BRL bond for BRL 2M at Dec 2011, the equivalent value in USD is

 (Issue at Dec 2011) 1,071,600 [USD]
 (Redemption at Dec 2014) 748,600 [USD].

It means you would lose 323,000 [USD] from this investment. BRL is a non-deliverable currency, and it could be settled in USD. Even if the interest rate in BRL is as high as 5.0%, the capital loss could not be covered.


3. Trend reversal within last 3 years
Another remarkable trend reversal after the Lehman crisis could be observed in JPY and AUD whose values have been downward trend since 2012 - 2013. Those currencies are considered relatively stronger after the Lehman crisis but the trend has reversed around that time.

< Figure III >

JPY has dropped against major currencies since the Japanese election on Dec 2012 and quantitative easing with the new administration. Australian interest rate has cut from 4.25% (Jan 2012) to 2.50% (Aug 2013) record low level, and AUD has turned into downward trend for that time and after. JPYUSD and AUDUSD have changed -34% and -17% respectively for last 3 years only though -14% and +4.7% for last 10 years.


4. General comments
AUD, CAD, SEK, NOK and RUB, which are considered sensitive to the oil price, have gone down later 2014 due to the crude oil price down.

< Figure IV >

GBP, NZD and CHF have been on flattened trend relatively since 2011 while other currencies have started dropping against USD.

< Figure V >

For earlier 2015, the crude oil price is one of the biggest factors leading financial trend. RUB is the most sensitive currency at the moment. If those were going to out of control, emerging market could collapse and even the developed markets could be in crisis like domino.


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