Press Release

The Federal Reserve and U.S. Treasury Did Not Intervene in FX Markets During the Third Quarter

November 09, 2018
NEW YORK – The Federal Reserve and U.S. Treasury did not intervene in foreign exchange markets during the July – September 2018 quarter, the Federal Reserve Bank of New York said today in its quarterly report to the U.S. Congress.

The U.S. dollar, as measured by the Federal Reserve Board’s broad trade-weighted dollar index, appreciated 1.3 percent in the third quarter of 2018. The dollar’s modest appreciation was driven by multiple factors, including an increase in financial market stress in multiple emerging markets, a perceived escalation of global trade tensions, and political developments in the United Kingdom and Italy, supported by a further modest widening of U.S. interest rate differentials compared with other major economies amid expectations for continued U.S. monetary policy normalization. Among major currencies, the dollar appreciated 2.7 percent against the Japanese yen and 0.7 percent against the euro, while depreciating 1.7 percent against the Canadian dollar. The dollar appreciated notably against most emerging market currencies, and precipitously against the Argentine peso and Turkish lira—by 42.8 percent and 31.9 percent, respectively—amid idiosyncratic developments in those countries. Finally, the dollar appreciated 3.7 percent against the Chinese renminbi, reflecting concerns about Chinese growth amid a perceived escalation in trade tensions with the United States.

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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