Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/153494
Authors: 
Fratzscher, Marcel
Year of Publication: 
2009
Series/Report no.: 
ECB Working Paper 1060
Abstract: 
A striking and unexpected feature of the financial crisis has been the sharp appreciation of the US dollar against virtually all currencies globally. The paper finds that negative US-specific macroeconomic shocks during the crisis have triggered a significant strengthening of the US dollar, rather than a weakening. Macroeconomic fundamentals and financial exposure of individual countries are found to have played a key role in the transmission process of US shocks: in particular countries with low FX reserves, weak current account positions and high direct financial exposure vis-à-vis the United States have experienced substantially larger currency depreciations during the crisis overall, and to US shocks in particular.
Subjects: 
Exchange Rates
financial crisis
global imbalances
shocks
transmission channels
United States
US dollar
JEL: 
F31
F4
G1
Document Type: 
Working Paper

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