I have adjusted the way I assess currency strength again. I am...

  1. 1,118 Posts.
    I have adjusted the way I assess currency strength again. I am now sticking to year long trends, basing my assumptions that economies don't change overnight.

    I have also changed the graph so that it is no longer a stack column graph. Rather, it is column graphs overlaid on top of each other. The difference is that the y axis now tracks % gains for the currency, not the cumulative % gains for all currencies (much more useful).
    20160116 FX Currency Strength.PNG
    In hindsight, this currency strength graph works well. Have a look at USDZAR:
    20160116 FX Individual Currency Pairs USDZAR.PNG
    USD pokes its head on the 6/11/2015, then at 26/11/2015, where it sustains its 2nd position all throughout the rest of year. Notice the accelerated growth from 20% to 40%.
 
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