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Dukascopy Research Thread

Commercial Content Analysts

DRT August 16, 2013, 11:45am 63

Last week there were already some doubts whether the Swiss Franc deserves appreciation, as it was sliding along with the common currency. The bearish tendency was preserved after the weekend as well, despite some of the positive reports that have been published lately, such as on retail sales and economic expectations. On Tuesday, amid the improving economic setting in the Eurozone, the Franc decoupled from the Euro and started moving south at an accelerated pace, creating a significant gap between the indices of these currencies.

In the end, even a substantial increase in value on Thursday (+0.8%) proved to be unable to remove the Franc from the list of the worst-performing currencies, on average it gave up 0.8% of its worth since last Friday, lagging behind all of its major peers, with the only justifying debasement fundamental factor being stagnant producer prices.
Against the New Zealand Dollar the Swiss Franc moved the most, namely 1.8% down, being that demand for kiwi was boosted by an improving economic picture (the volume of retail sales grew more than expected). The second most notable decline was recorded in GBP/CHF—1.3%, since the Sterling was buoyed by the constant inflow of positive data—falling number of claimants and increasing retails sales.

DRT August 19, 2013, 10:32am 64

The beginning of the last week the Euro started quite confidently, appreciating by 0.4%, although the data was not unanimously positive for the bloc. While the sentiment in the Eurozone seemed to be improving, industrial production was well below the estimations, but did not manage to lead the single currency astray from the bullish path. Accordingly, the Euro was predisposed to rally farther, especially considering that the GDP posted a positive growth rate after a long period of contraction.

Nevertheless, Wednesday turned out to be a bearish day, as the currency gave up all of its prior gains. The factor that weighed upon the Euro was strongly bullish behaviour of the British Pound that in turn got buoyed by the positive data published in the morning. Later on the Euro attempted to recommence a recovery, but the rally, made mainly at the expense of the U.S. Dollar that incurred significant losses amid the disappointing manufacturing statistics (-0.8%), proved to be unsustainable and was quickly eroded. As a result, for the period from Aug 12 to Aug 16 the Euro became on average only 0.2% more expensive, while the Sterling and the New Zealand Dollar became respectively 1% and 1.1% more expensive.

DRT August 21, 2013, 10:40am 65

On the whole the U.S. Dollar has been bearish since Aug 14, losing 0.6% of its value if viewed as an equally-weighted index consisting of eight pairs. The currency underperformed the most relative to the Swiss Franc (-1.6%) due to an influx of funds into the safe havens, and the British Pound (-1.3%), considering that the United Kingdom’s economic statistics are improving and the central bank therefore is not willing to enhance the stimulus. However, the debasement of the buck was not ubiquitous, it was able to become more expensive with respect to its counterparts from Oceania and with respect to its northern counterpart as well.

The bearishness of the currency was well-justified by the fundamental factors, being that most of the releases displayed a weak side of the U.S. economy, specifically in the manufacturing sector. Meanwhile, a fractional improvement in the labour market, shown by the decrease in the unemployment claims, was insufficient to restore the sentiment and provided only a temporary relief.
The effect of the disappointing numbers was amplified by the anticipation of the FOMC meeting minutes that are expected to give more insight into the plans of the Fed regarding the QE3. Against the background of weak macroeconomic picture, the officials may deem necessary to postpone the wrap-up of the currently running programme.

DRT August 23, 2013, 4:26am 66

In the absence of figures that would speak explicitly about the state of the U.K.’s economy, this week there were only public sector net borrowing and industrial orders expectations figures, the British Pound preserved the bullish momentum received last week. Then a series of various statistics was confidently speaking in favour of improving economic conditions, namely in the retail sector and in the labour market. Consequently, the Sterling appreciated by 0.7%, adding to already the most impressive among the peers monthly (2.1%) and half-year (5.7%) up-moves.

The largest portion of the latest gains of the Pound’s equally-weighted index were attributed to GBP/NZD that advanced 3%, since the New Zealand Dollar appears to have suffered the most from the outflow of funds from the emerging markets and the general risk-off sentiment ahead of the FOMC meeting minutes. In the meantime, despite the improving outlook with respect to the United Kingdom, it underperformed relative to the European currencies and the U.S. Dollar, since a lack of the positive reinforcement in the form of the positive data has led to the eventual exhaustion of the rally, while there were appearing more and more reasons for the investors to enhance their exposure towards the Euro.

DRT August 26, 2013, 10:04am 67

Despite the presence of some bearish factors, such as worse-than-expected German PPI (Aug 20) and disappointing services and manufacturing PMI in the several Euro area countries, the average price of the common currency was unceasingly moving upwards, posting gains every day of the last week. In the end this summed up into a 1.3% appreciation, leaving most of the counterparts, especially the New Zealand Dollar, far behind (EUR/NZD soared 4.1%). The only currency to outperform the Euro turned out to be the Swiss Franc (EUR/CHF slid 0.3%), whereas against the Swedish Krona it largely stayed unchanged.

While each day since Aug 19 the Euro has been bullish, the speed of appreciation varied quite noticeably depending on the context of the market. Surprisingly, the most impressive thrust in value the currency staged last Tuesday, when German producer prices were reported to decline. However, the effect of the information shared by the Bundesbank on the timing of the changes in the monetary policy previous day, amplified by the weakening U.S. Dollar in the wake of the FOMC meeting minutes that were to be released later in the day, proved to be beneficial for the shared currency that is now 4.7% more expensive than it was half a year ago, being second only to the British Pound—it is currently 6.2% more valuable than six months ago.

DRT August 28, 2013, 11:06am 68

Without looking at the dynamics in the U.S. Dollar currency index over the past five trading days, it may seem that the investors in the foreign exchange market have become more confident in the well-being of the world’s largest economy. We can come to such a conclusion considering exclusively the fact that on average the greenback is 0.6% more expensive now than it was on Aug 21. Moreover, the currencies that the buck did not manage to outperform, namely the Japanese Yen and Swedish Krona, were not able to increase the advantage to a substantial level, gaining merely 0.16% and 0.1% relative to the buck.

On the other hand, if we take into the account the timing of the major intervals of appreciation and depreciation, it becomes evident that the sentiment among the investors towards the U.S. Dollar is currently not strongly bullish and the upside potential of the currency may be limited.
We must admit—there were favourable for the Dollar events, such as the existing home sales, FOMC meeting minutes, manufacturing PMI and consumer confidence; however, it is also a fact that we received a plethora of reports that point to the risks to the economic recovery that still exist. Because of this the rally that took place last Wednesday was subsequently reduced by a significant amount.

DRT August 30, 2013, 10:59am 69

The period of the last five trading days was chary on the news from Japan. One of the few updates concerned the retail sales of the world’s third largest economy, but this figure is far from explaining how the Yen has outperformed all of its major counterparts, appreciating, on average, 1.2 percent. The report came in only late Wednesday and, in addition, was disappointing, meaning that if the price of the currency has been determined solely by this release since Aug 23, the outcome would be different, namely the Yen would most likely depreciate. Instead the most timid gains amounted to 0.5% (vs. USD), while SEK/JPY moved in favour of the Asian currency 1.8%.

However, these numbers include Yen’s performance on Wednesday and Thursday, when the currency performed poorly amid a retracement from the highs. The rally was started late Monday and was carried into the next day, resulting in a whopping two percent advancement of the index within just 24 hours. Among the reasons for such a spectacular performance of the Yen we may highlight instability of the geopolitical situation in the world coupled with the massive outflow of funds from the emerging markets into their safer peers.
In the longer-term perspective, the Yen still remains bearish, its equally-weighted index is currently 3.6% cheaper than half a year ago.

DRT September 2, 2013, 10:20am 70

Even though in the perspective of six months the single European currency remains one of the most bullish foreign exchange instruments, gaining 4.6% and losing only to the British Pound, which in turn appreciated by 6.5%, the most recent weeks, including the one ended on Aug 30, the Euro has been getting softer with each new day. The sell-off by the market participants, however, appeared to be completely justified, given that a majority of news related to the Eurozone and released starting from Aug 26 took away a substantial portion from the optimism.

As a consequence, on average relative to its main counterparts, the Euro gave up 0.7% of its value, winning only against the Swedish Krona (+0.8%) that nosedived amid the dismal retail sales data and in the end depreciated by 1.6%. One of the factors for such bearish behaviour of the Euro was decelerating inflation, but before that mixed economic situation in Germany, where improving business climate failed to increase the currency’s attractiveness, allowing the subsequently published labour market statistics to negatively influence the valuation. Moreover, unresolved situation in Syria also promoted downward bias towards the Euro, since the overall sentiment became risk-off, sizeably benefitting the Japanese Yen (+1.2%).

DRT September 4, 2013, 10:47am 71

Activity of the U.S. Dollar’s equally-weighted index in terms of duration was reduced to a sole day, namely Aug 29, while during the other dates the currency stayed completely unchanged, failing to find any reasons to gain or lose worth despite the events in different from the United States parts of the world. Neither abrupt decline of the Japanese Yen this Monday nor gradual depreciation of the single European currency were able to benefit the buck that usually does not miss an opportunity to appreciate at their expense.

In total for the period starting last Wednesday and ending Sep 3 the greenback advanced 0.9%, posting the most significant changes against the Japanese Yen (+2.3%), which lost footing after Shinzo Abe received approval for a sales tax hike, and against the Swedish Krona (+2.1%) that suffered substantial damage due to disappointing retail sales statistics.
As mentioned earlier, the lion’s share of the progress the U.S. Dollar made within the past five trading days is attributed to its explicitly bullish performance on Aug 29. It was mainly invoked by the surprisingly good data on the GDP growth rate of the world’s largest economy, which proved to be expanding at a 2.5% pace instead of the estimated 2.2%, up from modest 1.7% last quarter.

DRT September 6, 2013, 11:27am 72

From a fundamental point of view, the environment favoured appreciation of the Swiss Franc. At the very beginning of the studied period the expectations regarding the economy rose, as was shown by the leading indicators in aggregate. Later on, namely on Sep 3, the hopes proved to be justified, as quarterly GDP growth notably exceeded estimates of the market. However, given the tight correlation between the currencies due to the existing cap at 1.20, the Euro, having recently lost its bullish momentum, pulled the Swiss Franc along, forcing it to give up 1.6% of the value.

As it turned out, this was among the worst performances, comparable with the depreciation of the Japanese Yen, which was sold off following the approval Shinzo Abe received on the increase of the sales tax. The Swedish Krona was in a similar situation, its debasement amounted to 1.6% as a result of the dovish stance the Riksbank is currently holding.
The weakest performance the Franc showed relative to the Australasian currencies, improvement in the sentiment towards which was mainly boosted by the steadily growing GDP and an accelerated growth of the building approvals.

DRT September 9, 2013, 5:22am 73

The six-month and three-year global economic expectations worsened in August, a Dukascopy Bank SA poll showed. The six-month economic sentiment index fell 0.06 to 0.53. The three-year economic outlook declined 0.01 to 0.65.
The European six-month economic outlook slid 0.01 to 0.41. The three-year economic prospects improved to 0.56, from 0.51 in July when they deteriorated 0.07.
The North American economic outlooks also worsened. The six-month economic sentiment index retreated 0.05 to 0.66 and the three-year economic outlook fell to 0.71, the lowest level in 10 months.
The Asia-Pacific six-month economic expectations tumbled 0.12 to 0.53, the lowest reading since November 2011. The three-year sentiment index declined to 0.69 from 0.73 in July.

Figure 3 presents the term structure of the Dukascopy Bank Sentiment Index (Y-axis) mapped against GDP growth forecasts made by poll respondents (X-axis). Overall, DBSI values and GDP growth forecasts match directionally, suggesting the global economy will perform better three years from now.
Poll respondents suggest that the European economy will contract an annualized 0.10% in the next six months and will expand 0.90% three years from now.
Respondents revised the North American six-month and three year economic growth forecasts to 1.17% and 1.87% in August, from 1.87% and 2.34% respectively in July.
The Asia-Pacific economic sentiment remains subdued, despite strong growth projections (compared to other regions). Experts forecast growth of 2.70% and 3.73% six months and three years from now respectively.

Figure 4 presents the business cycle and its phases - expansion (real GDP is increasing), peak (real GDP stops increasing and begins decreasing), contraction or recession (real GDP is decreasing), and trough (real GDP stops decreasing and begins increasing).
More than a half of the respondents (22) suggest the European economy is in a recession. Twenty claim that the economy will be expanding three years from now.
Experts from academia are largely united about North America economic development stages - twenty four say that the regional economy will be expanding both six months and three years from now.
Experts are united about the Asia-Pacific 3-year EDS - 25 experts forecast expansion, 1 say the economy will reach its peak and 4 claim the economy will slide into a recession.

Figure 5 shows the six-month economic outlook for Europe, North America, and Asia-Pacific. The global six-month economic sentiment index declined to 0.53, the lowest level since December 2012.
The European six-month economic sentiment index slid 0.01 to 0.41. Thirteen respondents (43%) are pessimistic about the economic outlook, fourteen (47) say the outlook is “neutral” and only three (10%) claim the outlook is “positive”.
The North America six-month economic prospects also worsened. The sentiment index decreased 0.05 to 0.66 - twenty experts (66%) claim the outlook is “fairly” or “definitely” positive and eight (27%) suggest the economic outlook is “neutral”.
The Asia-Pacific sentiment index plunged to 0.53 from 0.65 in July with experts being strongly divided about the six-month outlook. Twelve respondents (40%) are either “fairly” or “definitely” positive about the six-month economic outlook, while eleven (36%) suggest prospects are either “fairly” or “definitely” negative.

Figure 7 presents the three-year economic outlook for Europe, North America, and Asia-Pacific. The three-year global economic outlook worsened for a third consecutive month to 0.65 from 0.66 the prior month.
The three-year European economic sentiment index gained 0.05 to 0.56 in August. Thirteen respondents (43%) say the outlook is “fairly” or “definitely” positive. Twelve (40%) claim that the three -year economic outlook is “neutral” and five (17%) say that the outlook is negative.
The North American three-year economic prospects deteriorated 0.02 to 0.71 in August, the lowest level in nine months. An absolute majority of respondents (84%) say the long-term economic outlook is either “fairly” or “definitely” positive and four (13%) claim prospects are negative.
The Asia-Pacific economic sentiment index declined to 0.69 from 0.73 the previous month. Nineteen experts (63%) say prospects are “fairly” or “definitely” positive.

DRT September 9, 2013, 10:45am 74

As it is apparent from the trajectory of the equally-weighted index of the common currency throughout the previous week, there was nothing that could have returned the Euro its former attractiveness. Consequently, the instrument continued to grind lower, this time losing 0.9% of its worth within five days. The news directly responsible for such a poor performance was lacklustre growth of Eurozone retail sales volume. Gloomy reports on the economic well-being of Germany also contributed to the continuous sell-off by accelerating it.

There were in fact a few attempts to halt the decline, namely during the ECB press conference (when the bank revised its forecasts upwards) and amid the disappointing U.S. employment change figure (which allowed the Euro to gain at the expense of the greenback). However, they were instantly negated by the dominantly negative sentiment and thus failed to change the generally bearish course of the single currency.
Meanwhile, in the longer time perspective, the index is only 0.2% lower than it was 20 trading days ago. If we look at an even greater time span—six months, than the Euro becomes one of the most bullish currencies (+3.26%), only behind the British Pound (+7.00%) and the Swiss Franc (+3.34%).

DRT September 11, 2013, 10:18am 75

Until Sep 4 the U.S. Dollar had been making strong gains due to the GDP growth rate overshooting expectations. As it subsequently turned out, the bullish run did not last for long, being negated in the end by a number of factors, which weighed upon the currency and forced it to give up on average 1.3% of the worth in terms of its major counterparts. The main gainers amid the U.S. Dollar’s debasement were the high-beta commodity currencies, namely New Zealand, Australian and Canadian dollars, which appreciated respectively 3.2%, 2.8% and 1.9% relative to the buck.

The only currency that was even more bearish than the greenback was the Yen, value of which was damaged more by the emerging risk-on sentiment (-2.1%), even though the forecasts on Japanese economy’s performance in the future have been revised upwards lately.
Weak demand for the safe haven assets was caused by stabilisation of the world’s geopolitical situation, but it was rather a background for than the primary driver of investors’ desire to reduce their exposure to the Dollar. It was the slightly disappointing employment change figure that completely nullified the positive effect of the improvement in the U.S. services sector, lower-than-expected unemployment claims and falling unemployment rate, thus confirming it was the most important event within the last five days.

DRT September 12, 2013, 6:56am 76

A brief summary of the research:

Rescaled range analysis, or RRA, is one of the many techniques used to examine and forecast the movements of economic indicators and financial assets. In contrast to various other methods, RRA can be applied to all kinds of data series regardless of their statistical properties. It can be viewed as a major advantage, as in most cases financial data does not meet the strict requirements of forecasting models.
In this research we examine the implications of RRA and the ways how to use the information it gives in practice.

In finance, RRA is used to study mean reversion and mean aversion in the process of price development. It is more commonly applied to stock market, but methodologically there are no restrictions against employing it for investigating exchange rates. Therefore we use RRA to try and classify the behaviour of two major currency pairs – EUR/USD and USD/JPY, - and two crosses – EUR/CHF and GBP/JPY. The datasets are formed from ten minute, one hour and one day candles up to August 2013.

Methodology
The main purpose of rescaled range analysis of a process is to estimate its Hurst exponent – a measure of the so called long-term memory. The notion of the Hurst exponent comes from an idea about dependence between certain characteristics of the process and a time span over which they are observed.

Results
1. Modified RRA gives more accurate results for random processes.

2. RRA classifies all examined exchange rates as strongly trending.

3. RRA shows a direct relationship between time-separated returns.

Conclusions
We studied two methods of estimating the Hurst exponent – the measure of long-term memory in a process. We saw that classical rescaled range analysis, which is one of the most commonly used means for estimating the parameter, and its modified version both have their own flaws. Classical RRA proved to overestimate the Hurst exponent, while the modified method, on the contrary, produced underestimated values. However, modified RRA gave a lesser error of estimation, and thus seemed to be more accurate.

All examined exchange rate had high values of the Hurst exponent, indicating a tendency to follow persistent trends. In most cases these high values were supported by relatively high ADX. We also saw that against the background of the high values of the Hurst exponent the existing trends most often preserve their direction and strength for some period in future. However, the analysis of the exchange rates did not give any values of the Hurst exponent equal to or lesser than 0.5, while there were plenty of cases of the small values of ADX. Therefore it is hard to make assumptions about a relationship between the results of RRA and more popular measures of describing trends.

RRA provided some new insight into the behaviour of currency pair returns. It appeared that there is a direct relationship between multiperiod logarithmic returns, and that it strengthens with increasing periods. Results show that the sets of ten- and more period returns have a Hurst exponent high enough to classify them as persistent. This denies the pure randomness of the development of currency pair returns and suggests that there might be fairly efficient methods for modelling the returns and thus forecasting future moves.

DRT September 13, 2013, 10:21am 77

This week the British Pound has been recovering from losses incurred last Friday, when the index fell 0.5%. Then the selling pressure was invoked by a notable deceleration in manufacturing production growth coupled with widening trade deficit. Neither softness of Eurozone data nor unsatisfactory results of the U.S. labour market that resulted in depreciation of the respective currencies managed to benefit the value of the Sterling in any noticeable way, though we may suspect its dip could have been significantly deeper, if the German industrial production had not contracted as much and non-farm payrolls number had come out as expected.

After the weekend there was a growing interest of investors in riskier assets, as a result of which the Pound was able to gain against the safer currencies, such as the U.S. Dollar (+1.3%) and the Japanese Yen (+1.1%). However, even despite a decrease in the unemployment rate, the Sterling’s rate of appreciation proved to be unable to outpace the New Zealand Dollar (-1.6%) and the Swedish Krona (-1.3%).
On the whole the U.K. currency retains the upward momentum, being underpinned by generally positive economic data. During the past 20 days the equally-weighted index went up by 1.2%. In the perspective of the last six months, the Sterling is the most bullish currency, it rose on average relative to its major counterparts by 6.4%.

DRT September 16, 2013, 11:19am 78

Along with its partner, the Swiss Franc, the common European currency continues to exhibit distinct unresponsiveness to the latest events, staying at the same level all the way from Sep 9 to Sep 13. There was virtually no change in the Euro’s equally-weighted index over the past five trading days. Even if we take into account a longer time period, specifically 20 days, the value of the Euro on average slipped by merely a quarter of a percent, while the British Pound and the Australian Dollar, for example, within the same time period managed to gain 1.6% and 1.5% respectively.

The biggest last week’s movers were the currencies with extreme risk profiles. From the one side—high-beta currencies, namely the New Zealand Dollar and Swedish Krona, from the other—safe havens, such as the U.S. Dollar and Japanese Yen. The first group was staging impressive gains at the expense of the latter, being that the sentiment across the markets was notably improving amid better forecasts on Japan’s GDP growth and amid accelerating expansion of the Chinese industrial production. However, this was mostly topical during the first part of the week, afterwards the currencies lost their momentum and were largely trading sideways on Thursday and Friday. The maximum deviations for NZD, SEK, USD and JPY amounted to 1.9%, 1%, -1.6% and –1.6% accordingly.

DRT September 18, 2013, 10:45am 79

The U.S. Dollar follows the bearish trajectory initiated on Sep 6 that came to replace the 12-day bullish run (Aug 21—Sep 6), as the public became concerned with respect to the U.S. labour market, which had not created as many jobs as estimated, even though the unemployment rate had been consistently moving down and overall showed a positive tendency. This time the greenback gave 0.9% of its value, being outperformed by all of its major counterparts, but losing the most relative to the New Zealand Dollar (-1.95%).

However, the decline in the Dollar’s index was not gradual. For the most part it came from the weekend gap that appeared throughout the buck’s crosses as a result of Larry Summers withdrawing from the race to becoming the next Fed chairman and thereby solidifying the case for an extended period of easing, since he was a notable proponent of soon tapering of the programme.
On average, Monday opening prices (for USD crosses) were 0.7% lower than Friday closing prices, reflecting a major shift in the sentiment the event brought along with it. Accordingly, a subsequent rally this Monday should rather be treated as a correction than a reversal; also because there were no fundamentally important news that could have changed the trend by 180 degrees.

DRT September 20, 2013, 10:36am 80

Just like many other currencies the Japanese Yen stayed largely immovable the first two days of this week due to the FOMC statement that lay ahead. Before the weekend Asian currency was significantly more mobile, reacting strongly to the changes in the general sentiment in the market, which in turn benefited riskier currencies and forced safe havens to decline. Afterwards Yen’s equally-weighted index did make a few corrections amid the Eurozone data on economic sentiment (Sep 17) and BOE meeting minutes (Sep 18) before the major event, but the changes in Yen’s valuation remained minimal.

A completely another picture was observed in the aftermath of the FOMC statement, as already weak position of the Japanese Yen was aggravated even further. However, surprisingly more dovish than broadly expected stance of Ben Bernanke influenced the Yen in a different way from its impact on the U.S. Dollar, Aussie and kiwi, where the new information was priced in immediately. The change in the Japanese Yen was significantly less sharp, but at the same lasted for a substantially longer time period, stopping only in the middle of the next day. Then the focus of the investors shifted due a sequence of positive data on the U.S. economy, namely growth of the home sales, improvement in the manufacturing sector and lower-than-expected unemployment sales, as a result the price of the buck was lifted.

DRT September 23, 2013, 9:56am 81

Last week the common currency demonstrated an example of stability by deviating the least from its base value throughout the five-day period. While the major currencies were noticeably reacting to the economic events that have taken place since Sep 16, the Euro remained completely unaffected by any of the happenings. Even the FOMC statement, that cut the equally-weighted index of the U.S. Dollar by a whole percent in just an hour, was unable to move the average value of the single European currency at all. At the same time the New Zealand and Australian dollars gained because of the dovish comments by the Fed’s chairman.

With only Thursday’s context in the background the Euro’s price managed to rise. However, there were literally no events directly associated with the Eurozone. Accordingly, it is likely that depreciation of the Japanese Yen and the British Pound, respectively caused by Kuroda’s speech and poor retail sales data in the U.K., enabled a shallow but nevertheless rally of the Euro that day.
On the whole the Euro became expensive the most relative to the Japanese Yen (+1.7%), Canadian Dollar (+1.3%) and U.S. Dollar (+1.2%), though the advancement was largely negated by the outperforming Swedish Krona and New Zealand Dollar that benefited substantially from the risk-on sentiment.

DRT September 25, 2013, 10:35am 82

Perhaps the most interesting developments are observed in the correlations between the USD crosses. It was clear that the FOMC statement would strengthen these links, but at the same time it seems nearly impossible to estimate to what extent and how long will the event be relevant. This is when the average correlation coefficient may be of help, as this measure is a proxy to the currency’s significance in the foreign exchange market. It tends to rise when the degree of consistency in the currency’s crosses is on the rise and vice versa.

Thereby the average coefficient skyrocketed from 0.23 up to 0.92 on Wednesday and remained elevated for two whole days, meaning that the U.S. Dollar took the lead and was the main determinant of the exchange rates in the market.
After the weekend, on the other hand, there was no trace left of this event. The average coefficient went back to 0.3-0.4, signifying the importance of the greenback returned back to the decreased levels and this currency no longer at the forefront, as, for example, are the cases for the Japanese Yen and New Zealand Dollar, though high significance levels of the former are considerably more stable than for any other currency, but may also come under pressure from time to time.