Currencies that gained or lost the most in 2022

This year was especially volatile for the Forex markets, causing many currencies to end in red. The biggest mover of the year was the USD/JPY pair. However, the U.S. dollar was the strongest of the pair, while the Japanese Yen suffered a lot. The central bank fundamentals drove both currencies to their respective positions.

The U.S. Federal Reserve increased rates aggressively, maintaining the fastest pace among the major countries. Overall, the agency hiked rates by 4.25%, reaching 4.5% at the end of 2022 from 0.25% at the end of 2021.

On the other hand, the Bank of Japan decided to maintain its steady rate policy to avoid economic recession. As a result, it did not hike once last year, despite rising inflation. However, that means the investors abandoned the Yen and bought the greenback instead. The USD/JPY pair skyrocketed to the highest level since July 1990, reaching its peak on October 21, 2022. The pair added 32.02% for the year. While the USD/JPY pair lost some of its gains recently, it’s still higher by 13.91% compared to 2021.

CHF was another big gainer last year. The SNB hiked rates by 1.75% – less than other major central banks (not counting the Bank of Japan). However, the Swiss franc greatly benefited from safe-haven flows last year.

Which currencies suffered the most?

Aside from the Japanese Yen, the British Pound shaved off the most amount. The Ukraine War and its proximity to the EU nations weighed heavily on the currency. Political uncertainty also pushed the sterling lower. The U.K. changed three separate PMs last year.

Consequently, the GBP/USD pair plummeted to a low of 1.0352 on September 26. But at the end of 2022, the Pound managed to recover some of its losses. The dollar’s weakness also helped it to gain footing. The Euro ended last year will gains, while the AUD, CAD, and NZD fluctuated.

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