U.S. Monetary Authorities Did Not Intervene in FX Markets During the Second Quarter
August 11, 2016

NEW YORK – The U.S. monetary authorities did not intervene in the foreign exchange markets during the April—June quarter, the Federal Reserve Bank of New York said today in its quarterly report to the U.S. Congress.

During the second quarter of 2016, the U.S. dollar appreciated 0.9 percent against major currencies as measured by the Federal Reserve Board’s trade-weighted major currencies index. The beginning of the quarter saw a continuation of the broad U.S. dollar depreciation that began earlier in the year, but that trend reversed in May owing to communication from the Federal Open Market Committee (FOMC) that market participants interpreted as less accommodative, and stronger U.S. data. Safe haven flows stemming from international developments, namely the June 23 referendum on the United Kingdom’s membership in the European Union, led to additional dollar appreciation into the end of the quarter. On net, the U.S. dollar appreciated against most major currencies over the quarter with the exception of the Japanese yen and the Canadian dollar. The British pound depreciated sharply against the dollar immediately following the outcome of the U.K. referendum, leading to a 7.3 percent decline in the pound–dollar exchange rate over the quarter. Most emerging market currencies depreciated against the dollar owing to heightened risk aversion and idiosyncratic issues, with the Mexican peso and Chinese renminbi the weakest performers among the currencies of major U.S. trading partners.

The report was presented by Simon Potter, executive vice president of the Federal Reserve Bank of New York and the Federal Open Market Committee’s manager for the System Open Market Account, on behalf of the Treasury and the Federal Reserve System.

The full report is available on the New York Fed’s website.

Suzanne Elio 
(212) 720-6449

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