Forex Year End Checkup

The latest infographic released by OANDA is a “tongue-in-cheek” look at the relative health for the world’s major currencies. Using some of the indicators that typically have the most impact on exchange rates, together with comments from authorities and government officials, the medical chart even offers a “prognosis” for the coming months.

No review of the past year could possibly begin with a topic other than the Eurozone debt crisis. Despite a dozen or so emergency meetings, and a few hundred billion in emergency funding being committed to the cause, the Eurozone picture is actually worse today than it was one year ago. On December 15th, Christine Lagarde, head of the International Monetary Fund, described the global outlook as “gloomy” and the peril facing the European economy in particular as “escalated”.

So what does this mean for other currencies? For the U.S., it probably means a gain in demand as during times of uncertainty, investors typically adopt a “safe haven” play by abandoning other currencies in favor of the dollar. For the Canadian and Australian dollars, weaker global demand for exports and raw materials could result in slower growth for the respective economies.

Click on the infographic below for a closer look at the major currencies:

Created by OANDA

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