What Currencies Gained and Lost the Most in 2022
Many currencies ended in red this year due to volatility in the Forex markets. The USD/JPY exchange rate was the largest mover. However, the U.S. Dollar was the strongest pair while the Japanese Yen suffered a lot. Both currencies were driven by the central bank fundamentals.
The U.S. Federal Reserve raised rates aggressively, continuing to maintain the fastest rate among major countries. Overall, rates were raised by 4.25% and reached 4.5% at end 2022 from 0.25% in 2021.
To avoid an economic recession, however, the Bank of Japan decided that it would continue its steady rate policy. It did not raise its rate last year despite inflation rising. Investors opted to buy the greenback and abandon the Yen. The USD/JPY currency pair rose to its highest point since July 1990. It reached its peak October 21, 2022. The USD/JPY pair gained 32.02% in the past year. While the USD/JPY pair lost some of its gains recently, it’s still higher by 13.91% compared to 2021.
CHF was another major gainer last year. The SNB hiked rates by 1.75% – less than other major central banks (not counting the Bank…