USD is a key currency and used widely as means of settlement of international financial market and business dealings. In addition, about 60 % of foreign currency reserves worldwide are possessed in USD. Because China is currently the largest USD possessing country, at times remarks about US Treasury made by Chinese administration officials have affected dollar exchange rate. Although dollar exchange rate would react accordingly to US’s favorable and unfavorable factors before subprime shock in 2007, dollar’s excess liquidity occurred because Federal Open Market Committee (FOMC) decided to go for quantitative easing due to crisis response in 2008. After that, as investment funds are likely to go from noninterest-bearing USD to high-interest-rate currencies if investors’ risk tolerance recovers, in fact there is a tendency for the currency exchange to go for weak dollar as a favorable factor for US.

EUR was introduced in January 1999 as a single currency of European Union (EU) member nations. Currently the EU expanded to 16 member countries and its population and GDP are almost same as US. Its currency transaction volume is the second largest next to US and EUR has established its position as second key currency. Therefore, the importance of its role as an alternative currency of USD has been increasing. We see the tendency for EUR to rise when USD drops due to some unfavorable factors. Although the increase in its member nations and the expansion of the economy are favorable factors to EUR in the long term, as an aggregation of multiple nations it has unfavorable factors such as 1.the economy gap among member nations is likely to widen and 2.there may be a delay in policy decision due to conflicting interests of each nation.

The world's largest financial district, the City in the British capital London makes the volume of foreign exchange business of London market the largest in the world. However, its economic structure centered on finance had a negative impact at the subprime shock and the British economy suffered a major setback. Bank of England (BOE) is easing its grip on credit by lowering policy rate to 0.5 % for the first time. Pound yen was the high price of 251 yen level first half before the subprime shock in 2007 and later it was the low price of 118 yen level latter half, which means it dropped sharply more than 130 yen, but it has been gradually recovering in anticipation of the recovery of the global economy. Attention in the market will be given to the economic recovery in England and the financial policy stance of BOE hereafter. In addition, it needs to be taken into consideration that GBP rate exhibits relatively more volatility than dollar or EUR when investigating.

Switzerland, famous as a permanent neutral country, is unique in that it takes the conservative economic policy when compared to EU countries. Therefore, in times of emergency such as the increase of geopolitical risk, there is a tendency for CHF to be bought as a safe asset and actually CHF rose sharply right after the subprime shock. As price movements of EUR CHF and EUR yen, and GBP CHF and GBP yen fully correlate with each other, CHF tends to show same price movement as JPY. However, even CHF fell sharply from 105 yen level first half to 74 yen level latter half against yen due to the independent rise of yen after the Lehman Shock in 2008. Swiss economy largely depends on trades with EU nations, especially the export to Germany accounts for 20 % of the total. Thus, the recovery of Eurozone economy seems to be the key for Swiss economy to recover and for the real increase of CHF.

Rich in resources, Australia is the largest exporter of coal and iron ore and exports wide variety of other resources such as nonmonetary gold and crude oil. This makes AUD susceptible to commodity prices. Because China has surpassed Japan and become a major export market of Australia (as of August 2009), AUD is also susceptible to Chinese manufacturing PMI which is an economic indicator that shows Chinese economic trend, and Chinese stock prices. In addition, as the interest rate is relatively higher than USD and yen, AUD tends to be bought against USD and yen when investors’ risk tolerance becomes higher. Therefore, it is likely to indicate same price movement as risk assets. For example, one of the features is that the price movement of American stock prices and AUD yen are highly correlated.

As it has a strong economic relationship with Australia, NZD rate is highly correlated with AUD rate. However, the biggest difference from Australia is its economic scale. The population is about 4.2 million, GDP is about 13 % scale of Australia, and dairy goods and meats constitute nearly 30 % of export items. Those factors contribute to weaker resilience from the recession after the subprime shock comparing to Australia and NZD performance has fallen below against AUD. If the global economy recovers and NZD interest rate surpasses AUD again, there is a possibility for NZD to surpass AUD performance. As shown in the fact that its policy rate was 8.25 %, the highest among advanced countries before the subprime shock, NZD is largely affected by risk tolerance of foreign investors because New Zealand attracts foreign investment through its high interest rate.

Canada has a close relationship with US economically as it is situated next to US. It is susceptible to US economy because 80 %, a majority of the total exports go to US. Also, Canada has sandstone which contains high-viscosity crude (oil sand) and is the largest exporter of crud among advanced countries. In addition, it is rich in mineral resources such as natural gas and coals other than crude. Therefore, the feature of CAD is that it is susceptible to the crude market price, as CAD rises when the crude price increases.