J$ revalues against 3 main currencies

In today’s world people are so busy, they don’t have time to smell and admire the beauty of the roses, around them. Busy as we are, things are happening under our very eyes and feet, and many don’t even know it. Generally, we are headline people, the details we leave for another time.
Jamaicans have been so caught up with concern of the effect of the sliding dollar Jamaican dollar against the US dollar and the impact on their lives, they have not been paying attention to the details of what is taking place in the overall currency market.
Internationally, there have been lots of movements in major world currencies this year. The Pound lost 4 percent, the Canadian 5 percent and the Japanese yen 4 percent against the US dollar so far this year. The local currency has had moderate revaluation against the US dollar since hitting a low of $112.87 in July and is now at $112.64 as of Friday. But the revaluation against the Canadian since its low of 107.55 on July 9 up to Friday when it closed at $100.80 to the Canadian is much larger at 6 percent and the revaluation against the British pound is even more, with the Pound declining from $193.50 on July 16 to $180.17 on Friday Oct 3, a gain of nearly 7 percent for the Jamaican dollar. Based on the flows of these two currencies, where inflows are always more than sales the revaluation against them could well be greater than these numbers show, if normal market forces were to prevail.
At the end 2013 the US dollar was selling for $106.38, the Canadian for $99.22 and the Pound at $175.84, to the Jamaican dollar. The end result is that the Jamaican dollar, has hardly lost value against the Canadian so far and the Pound is down around 2.5 percent for the year to date, but Jamaican dollar has devalued 6 percent versus the US dollar, this year so far.
Factors that could play out going forward. The tight fiscal discipline that the Jamaican government has to adhere to, is squeezing excesses out of the system and reducing demand for foreign exchange. The Bank of Jamaica’s large intervention in July, seems to have removed the overhang of demand for US dollar from the system. The expected high demand, low inflow period from September to mid-December is not reflecting the usual pattern of past years, allowing some revaluation to take place. The stability is encouraging portfolio shifts out of foreign exchange holdings, back into Jamaican dollar, as investors see a long period of stability to at least late next year. The rise in US dollar, is one reason why the devaluation of the Jamaican dollar versus the Pound and Canadian dollar, have been very moderate so far, this year. The US dollar rise is reducing the cost of oil, the price has fallen a bit this year from a peak of US$105, and is now at $89, having spent March to July over $95, the forecast is for lower prices as the US dollar gets stronger, with economic activity in the US picking up steam. Lower oil prices, mean less costly import of the commodity for Jamaica. The final scenario is how much change will Bank of Jamaica allow in the local currency?