Press Release

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

February 11, 2021

NEW YORK—The Federal Reserve and U.S. Treasury did not intervene in foreign exchange markets during the October – December 2020 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, depreciated 4.9 percent in the fourth quarter of 2020, the largest quarterly depreciation since the second quarter of 2009.

The depreciation was driven primarily by improved global risk sentiment amid the advent of multiple effective COVID-19 vaccines, as well as reduced policy uncertainty following the U.S. election and continued expectations for U.S. monetary policy to remain accommodative. While dollar depreciation was broad-based, emerging market currencies outperformed relative to G10 currencies. Among major currencies, the U.S. dollar depreciated by 9.9 percent against the Mexican peso, 5.5 percent against the British pound, 4.1 percent against the euro, 3.9 percent against the Chinese renminbi, and 2.1 percent against the Japanese yen.

The report was presented by Lorie Logan, 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.

Brian Manning
(212) 720-6143
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