External Debt Sheds Light On Drivers Of Exchange Rate Fluctuations

April 18th, 2015
in econ_news

from the Dallas Fed

During times of financial crisis and panic, global capital flows can suddenly shift. Such movements were particularly evident in the months following the September 2008 collapse of Lehman Brothers, when global investors engaged in a flight to quality, selling risky positions and buying safe assets. The U.S. dollar rapidly appreciated because investors trusted the U.S. as the safest destination for their savings.

Follow up:


The New Zealand dollar, British pound, Swiss franc and Singapore dollar performed much as the U.S. dollar did during the first half of 2008.

[click on image below to continue reading]

Source: http://dallasfed.org/assets/documents/research/eclett/2015/el1504.pdf









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