Exchange Rate Now!

The Japanese Yen gained strongly against the Euro as a result of the global financial crisis that started in Oct 2008. From the exchange rate of 1 Euro = 163 Japanese Yen in Aug 2008, the Euro depreciated against the Japanese Yen to a rate of 1 Euro = 118 Japanese Yen in Feb 2009. This represents a 28% decline in the value of Euro compared to the Japanese Yen.

Fortunately for most Europeans, the Euro has since appreciated against the Japanese Yen as concerns over the global financial crisis abated (1 Euro is now worth 136 Japanese Yen).  Good news of course for Europeans who want to travel to Japan or buy Japanese products, who will certainly hope that the trend of appreciation continues.

It is interesting to note how the Japanese Yen demonstrated itself to be a safe-haven investment in recent years. From the global financial crisis to the Jakarta bombing, global events that destabilise the financial markets always lead to an immediate appreciation of the Japanese Yen (and the US Dollar) against the Euro. This despite the fact that the Euro is the second most traded currency in the world, ahead of the Japanese Yen and just right behind the US Dollar. Evidently, Euro is still not the currency of choice for defensive investment.

One can argue that the Euro is a relatively newer currency and there are still some concerns on how the European Union is able to effectively work with member countries in terms of mapping out a suitable monetary policy. In addition, emerging competitors in the form of the Chinese Renminbi and the Indian Rupee offers forex participants more leverage on emerging markets, where investors will now turn to after the global financial crisis where confidence in the United States and Europe are shaken.

Therefore, while the Euro can continue the holiday up the appreciation chart against the Japanese Yen, it might be a tough call to forecast that the Euro may even surpass the Yen to levels seen before the global financial crisis –  at least not in the medium term. The global financial crisis in year 2008 has prompted most monetary authorities and sovereign wealth funds (SWF) to increase their reserves in the US Dollar and Japanese Yen, and it is unlikely that this big chunk of reserves will be released anytime soon.

Besides United Kingdom, Switzerland is another country that has yet to jump onto the Euro bandwagon. Swiss Franc (CHF) is the currency used  Switzerland and there has been no signals from the Swiss government that they will adopt the Euro anytime soon.

Due to the unique status of Switzerland as a banking haven as well as a self-designated “neutral” country during war times, Swiss Banks are the magnet for storage of investments from wealthy individuals (and sometimes crimimals) all over the world. These people park their investments as gold (stored in gold vaults), in foreign currencies (in Swiss Banks) or simply leave it to investment firms to manage their finances in whatever manner is deemed fit.

Swiss Franc, as a result of Switzerland’s financial stability and reputation, remains one of the most traded currency in the world, ranked 5th, just behind the US Dollar (USD), Euro (EUR), Japanese Yen (JPY) and the Sterling Pound (GBP).

Currently, 1 Swiss franc trades at 0.658 Euros, which has stabilised since the spike in Mar 2009 (between 0.65 and 0.68 within 1 week!) (more…)