Money
Visualizing Currencies’ Decline Against the U.S. Dollar
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Visualizing Currencies’ Decline Against the U.S. Dollar
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In a highly volatile and difficult year for many currencies and equities, the U.S. dollar has been a safe haven for investors.
The greenback has provided exceptional stability, with almost every currency around the world declining against the U.S. dollar in 2022.
This graphic visualizes almost 50 years of the Dollar Index’s returns along with the decline of major currencies against the U.S. dollar in the past two years using price data from TradingView.
U.S. Dollar and Major Currencies’ Returns in 2022
As shown in the graphic above, the past two years have seen nearly every major currency lose value against the U.S. dollar.
One of the currencies hit hardest is the euro, which briefly fell below parity (meaning the euro was worth less than one U.S. dollar) in September and October of 2022, before recovering with a 5.3% rally in November.
Currency | 2021 Returns | 2022 YTD Returns |
---|---|---|
Japanese Yen (JPYUSD) 🇯🇵 | -10.4% | -14.7% |
Indian Rupee (INRUSD) 🇮🇳 | 2.0% | -9.6% |
Pound Sterling (GBPUSD) 🇬🇧 | -1.1% | -8.0% |
Chinese Yuan (CNYUSD) 🇨🇳 | 2.7% | -8.6% |
Euro (EURUSD) 🇪🇺 | -7.0% | -6.0% |
Canadian Dollar (CADUSD) 🇨🇦 | 0.7% | -6.6% |
Australian Dollar (AUDUSD) 🇦🇺 | -5.7% | -5.2% |
Swiss Franc (CHFUSD) 🇨🇠| -3.0% | -1.1% |
2022 YTD Returns as of December 14th 2022. (Source: TradingView)
However, the Japanese yen was the major currency hit hardest, having fallen more than 25% since the start of 2021. At the yen’s lowest point this year in October, the currency breached 24-year lows, resulting in the Bank of Japan intervening with $42.8 billion to support the country’s falling currency.
The Swiss franc and Canadian dollar have been the most resilient major currencies against the U.S. dollar since 2021, largely due to the financial and political stability of those nations. Along with this, Canada has benefitted from surging crude oil prices in 2022, exporting the majority of its crude oil across its southern border to America.
Three Reasons for the U.S. Dollar’s Strength in 2022
A variety of factors have contributed to the U.S. dollar’s strength in 2022. The rapid raising of interest rates by the Federal Reserve and tightening of their balance sheet has resulted in U.S. dollars becoming a more scarce and valuable yield-bearing asset.
As interest rates have risen, so have yields for savings accounts and fixed-income securities like U.S. treasuries, making them a more attractive alternative for investors.
At the same time, falling equity prices (especially in the technology sector) only further incentivized investors to pull out of riskier equity markets into the safety of the dollar.
Lastly, compared to many other global economies, the U.S. economy has remained resilient with the fewest risks on its horizon. Europe continues to face an ongoing energy crunch with the Russia-Ukraine conflict nearby, while China’s zero-COVID policies have hampered the country’s manufacturing sector, as well as other industries.
How Will Currencies Fare in 2023?
While the U.S. dollar has surged for much of 2022, its rally has started losing steam in the final months of the year.
In September of 2022 the Dollar Index was up 20% on the year reaching a high of 114.8, but has since retreated and given back more than half its gains for this year so far.
Investors around the world will be watching closely to see if the U.S. dollar’s rise will continue, or if this end-of-year reversal will carry through and provide major currencies some relief going into 2023.
Demographics
The Smallest Gender Wage Gaps in OECD Countries
Which OECD countries have the smallest gender wage gaps? We look at the 10 countries with gaps lower than the average.
The Smallest Gender Pay Gaps in OECD Countries
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Among the 38 member countries in the Organization for Economic Cooperation and Development (OECD), several have made significant strides in addressing income inequality between men and women.
In this graphic we’ve ranked the OECD countries with the 10 smallest gender pay gaps, using the latest data from the OECD for 2022.
The gender pay gap is calculated as the difference between median full-time earnings for men and women divided by the median full-time earnings of men.
Which Countries Have the Smallest Gender Pay Gaps?
Luxembourg’s gender pay gap is the lowest among OECD members at only 0.4%—well below the OECD average of 11.6%.
Rank | Country | Percentage Difference in Men's & Women's Full-time Earnings |
---|---|---|
1 | 🇱🇺 Luxembourg | 0.4% |
2 | 🇧🇪 Belgium | 1.1% |
3 | 🇨🇷 Costa Rica | 1.4% |
4 | 🇨🇴 Colombia | 1.9% |
5 | 🇮🇪 Ireland | 2.0% |
6 | ðŸ‡ðŸ‡· Croatia | 3.2% |
7 | 🇮🇹 Italy | 3.3% |
8 | 🇳🇴 Norway | 4.5% |
9 | 🇩🇰 Denmark | 5.8% |
10 | 🇵🇹 Portugal | 6.1% |
OECD Average | 11.6% |
Notably, eight of the top 10 countries with the smallest gender pay gaps are located in Europe, as labor equality laws designed to target gender differences have begun to pay off.
The two other countries that made the list were Costa Rica (1.4%) and Colombia (1.9%), which came in third and fourth place, respectively.
How Did Luxembourg (Nearly) Eliminate its Gender Wage Gap?
Luxembourg’s virtually-non-existent gender wage gap in 2020 can be traced back to its diligent efforts to prioritize equal pay. Since 2016, firms that have not complied with the Labor Code’s equal pay laws have been subjected to penalizing fines ranging from €251 to €25,000.
Higher female education rates also contribute to the diminishing pay gap, with Luxembourg tied for first in the educational attainment rankings of the World Economic Forum’s Global Gender Gap Index Report for 2023.
See More Graphics about Demographics and Money
While these 10 countries are well below the OECD’s average gender pay gap of 11.6%, many OECD member countries including the U.S. are significantly above the average. To see the full list of the top 10 OECD countries with the largest gender pay gaps, check out this visualization.
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