Board of Governors of the Federal Reserve System

Figure 1. Real Broad Trade-Weighted Exchange Value of the Dollar

Series: Real broad trade-weighted exchange value of the dollar

Horizon: January 1973 to October 2015

Description: The data are monthly and indexed on March 1973. A horizontal line is drawn at 100. The real broad trade-weighted exchange value of the dollar starts slightly above 105 in early 1973 before gradually declining over the next five years to around 84 in October 1978. Following this trough, the series steadily increases to about 128 in February 1985 before steadily declining over the following three years to around 90 in late 1988. It then continues to decline, but at a lower rate, for the next seven years to about 84 in July 1995. The series then experiences another period of increase, reaching about 113 in February 2002, before experiencing a period of decrease, hitting about 84 in mid-2008. It then exhibits a sharp incline during the financial crisis, reaching about 97 in March 2009. This sharp incline is followed by a sharp decline over the following two years to around 80 in July 2011. Following this sharp decline, the real broad trade-weighted exchange value of the dollar is fairly steady around 85 until late 2014, when it begins to increase again, reaching about 98 in October 2015.

Source: Federal Reserve Board, Statistical Release G.5, "Foreign Exchange Rates"; Haver Analytics.

Figure 2. Estimated Effect of 10 Percent Dollar Appreciation on the United States

Figure 3. Estimated Effect of 10 Percent Dollar Appreciation on U.S. Net Exports

Figure 4. Estimated Effect of 10 Percent Dollar Appreciation on U.S. Core Inflation