Summer 1996 - Volume 2, No. 1
Tennessee Trade Weighted Dollar Index
Tennessee's trade-weighted dollar index has been holding steady through the first months of 1996. The increase in the dollar that began in mid-95 actually did not crest until March of this year, but there has been little real movement since last November. The index took a slight dip, to 111.85, in April. Twelve of the twenty-two currencies composing the index, including most of the European currencies, fell against the dollar over the course of the first quarter. The Japanese yen fell about 1.5 percent. But these declines were small, and were outweighed by advances in the remaining currencies. Australia posted the single biggest rise: 6 percent. More significantly for Tennessee traders, the Mexican peso gained about 2.5 percent against the dollar, breaking its relentless fall of recent quarters. Changes in the trade-weighted dollar index have predicted changes in Tennessee's rate of export growth about six months in advance. So, if it is sustained, the peaking of the index signals good news for the state's exporters.
Return To The Table Of Contents