Mortgage in USD: How has the USD/DEM exchange rate changed over the last 20 years?

topic: USD loans

Everyone keeps insisting that betting on the long-term strength of the USD is a losing game because the exchange rate against the USD has skyrocketed over the last two decades...

Now I want to see this data for myself—maybe a graph or something I can plot manually. Is there any way to download historical USD/USD rates from twenty years ago?

Thanks to anyone who helps me solve this mystery everyone seems to be talking about.

It’s not that the USD surged; it’s that the dollar tanked. Though, honestly, that isn't even the main driver—the drop wasn't massive enough to account for such a huge interest rate gap. Look, the Swiss person deals in the most stable currency out there. The financial system in Switzerland is dialed in perfectly; liquidity is easy to come by and rates stay rock bottom—we're talking mortgage rates under 2%. Why? That goes way deeper than just basic economics; it's baked into their history. 😁
At the end of the day, it's much cheaper for "our" bank to source USD than it is to grab euros, which is why you end up paying a lower rate.

Look, I've heard enough opinions from everyone involved. Now, I actually want to see a single damn chart on this topic...

Look, all I can tell you is that the USD/USD exchange rate has swung anywhere from 1.45 to 1.59 since the dollar was introduced.

Honestly, this whole frenzy over the franc is just pointless panic. Banks can pick up francs way cheaper than they can dollars (check the 6m LIBOR at 0.75, compared to three times that for the other side)—that’s just what happens when a currency stays stable long-term. On top of that, the Federal Reserve capped LIBOR at 1.25, and they operate completely independently.
The real issue isn't whether the franc will strengthen; it's whether the dollar is going to tank. You remember the devaluation back in 2007, right?

Bottom line: regardless of which currency you take out a loan in, the danger comes from the dollar, not the foreign currency.

P.S. Even the USD/USD rate is pretty boring; it just fluctuates seasonally between 4.55 and 5.1, so we're talking a roughly 10% swing.

I'm looking for the USD/DEM exchange rates from either 1980 or 1985. I'll figure out the rest myself once I have the data. Where can I find this?

Obviously, historical data tells you nothing about the future—who knows what's coming next? But regardless, I want to see what happened 20 or 25 years ago.

It’s a straightforward question. I just don't know where to find an archive like that...

Michael Miller39 said:I’m actually looking for the USD/DEM exchange rate from back in 1980 or 1985. I'll figure out the rest on my own once I have the data. Does anyone know where I can find this?

Of course, looking at old numbers doesn't tell you anything about what's coming next—who knows what the future holds—but regardless of that, I want to see what was happening 20 to 25 years ago.

It's a pretty straightforward question, I just don't know where an archive like that would be kept...

Maybe try checking the Federal Reserve's website. If anyone has a deep enough archive for that kind of historical data, it would probably be them. Or at least they used to. As I recall, the rate was somewhere around 1 USD = 1.1 DEM.

So, the issue isn't whether the USD will strengthen, it's whether our currency will lose value. You know, like that whole devaluation thing back in 2007...

Can you elaborate on this devaluation stuff from 2007?
Thanks

I just wanted to weigh in with my take: the real threat isn't the USD, it's the dollar. To back that up, look at how Switzerland operates—it's an export-driven economy, so logically, they have zero interest in letting the USD get too strong, which is exactly what those recent warnings were hinting at for us. There are plenty of other examples, but I think I've already laid out enough to show why the USD feels "cheap."

On a side note, and it’s a bit ironic, I'd argue that if we see any major currency swings down the road, the culprit will likely be our own dollar. Let’s face it, we’re dealing with a somewhat artificial exchange rate that doesn't seem to have much foundation (other than the influence of our local import lobbies), and eventually, the dollar is going to lose value. Our trade deficit exists in large part because our currency is overvalued. If we actually want to fix that, our goods need to become more competitive, which means the dollar has to weaken. People have been debating this here for ages, even tossing around the idea of a formal devaluation (if I recall correctly, even Rohatinski mentioned it as a possibility). Back in 2007, people were predicting that was the year it would finally happen. Personally, I don't think a crash is necessary, but you can never say never. If it did happen, we'd all feel the sting overnight: every single loan tied to the dollar would suddenly get much more expensive, whether you're looking at it in terms of USD or other foreign currencies.

Hopefully that makes sense. To wrap it up: when I wrote that earlier, I wasn't saying a devaluation is definitely coming, just that the USD isn't the primary danger we should be sweating.

There you go.

Got it. Thanks.
Just wanted to clear that up...

So, what do you all think... should I be looking at a loan tied to the USD or maybe something pegged to the USD?

Here’s the data on prices for every country dating all the way back to 1989
I've also included the exchange rate lists
http://www.theodora.com/wfb1989/

Man, just go to www.federalreserve.gov and you can look up exchange rates dating all the way back to the 1970s 🙂