Forex Power Rankings: Euro Strikes Back

No major currency has come out of the banking scare as strong as the euro - this week's strongest performer up +1.8% against its major currency counterparts. Though fear in the Eurozone has reduced dramatically and the flight-to-quality Japanese yen has given back part of its recent gains, the US dollar continues to see downside - this week's weakest performer down -1.5%.

Performance of individual currencies USD, EUR, JPY, GBP, CHF, CAD, and AUD in all their pair combinations against each other is measured and weighted equally when deriving the week-over-week net change found below; currencies are then ranked on their overall percentage net change.

Trend followers might trade in the direction of recent strength or weakness, while contrarians could trade against the trend, For example, trend followers tend to buy the strongest currency, and contrarians tend to sell it.

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1. Euro - EUR (+1.8%)

Last week's ranking: #4 (-0.5%)

The euro is finally bouncing back to year-to-date highs after a rough month of trade; EUR/USD traded above 1.09 at one point this week - a level that's only been twice in the last year of trading. Can the euro build on this strength, or is it destined to retread common territory?

2. British Pound - GBP (+0.6%)

Last week's ranking: #3 (+0.9%)

Similar to the highly correlated euro market, pounds have put together a string of positive days against its major pair partners - GBP is in the top 3 for a second week in a row. The big level to watch for many trader moving forward will be 1.25 in GBP/USD as it currently rests just a couple pennies lower.

3. Swiss Franc - CHF (+0.5%)

Last week's ranking: #2 (+1.0%)

The good times continue to roll in Swiss franc as CHF - like GBP - makes the top 3 for a second week in a row. While CHF is not making up much ground on its European partners EUR and GBP, the franc has appreciated significantly against the US dollar; comfortably below 0.92, the next level to watch for in USD/CHF will be 0.90 - a level unbroken since Summer 2021.

4. Japanese Yen - JPY (-0.3%)

Last week's ranking: #1 (+2.9%)

While the yen hasn't given back THAT much ground against other major currencies, it does feel like the fear that was lifting the flight-to-quality JPY higher has dissipated. That said, USD/JPY is still trading near year-to-date lows around 130, and traders will be watching to see if 125 or 135 is its next stop.

5. Australian Dollar - AUD (-0.5%)

Last week's ranking: #6 (-1.6%)

Of the three major currency markets with 'dollar' in their name, the Aussie is doing the best; this isn't to say that the Australian dollar is doing well - AUD depreciated significantly against EUR and GBP in the last week. AUD/USD, in the meantime, has been trapped between 0.66 and 0.68 for the last month.

6. Canadian Dollar - CAD (-0.6%)

Last week's ranking: #7 (-1.8%)

The only thing Canadian dollars have going for them this week is that they aren't US dollars; CAD went from #7 last week - the weakest major currency - to #6 as the only market it appreciated against was USD in the last week. USD/CAD falling back below 136 might be a short-term win for the embattled currency.

7. US Dollar - USD (-1.5%)

Last week's ranking: #5 (-0.8%)

Softer expectations for interest rates in the US correlated with its currency depreciating against every major currency on the board - USD saw most of its strength in the last year as a result of ascending US rates. The dollar is now challenging year-to-date lows against a host of its trading partners.