How did the pandemic affect the currency market?

 

The coronavirus pandemic has affected almost every area of ‚Äč‚Äčlife. We are all feeling the effects of the pandemic to a greater or lesser degree, and financial markets are suffering twice. What awaits currencies in this hard time? Will exchange rates stabilize? Will our finances suffer?

Financial market response to the pandemic

After the declaration of aby the WHO, markets reacted very violently and dynamically in the world. The situation was similar to that of 2008, 2009, when the world faced a financial crisis. Some investors left the market.

Listed companies recorded enormous drops. The US stock indices have stabilized, but are still below the February level. As the dollar is the most liquid currency in the world, it is doing quite well in the face of the crisis.

Polish zloty and the reaction to the pandemic

Our currency lost a lot at the very beginning, as everyone expected. However, the market has stabilized and, most importantly, is not losing. Depreciation is a perfectly normal reaction during a crisis. Other currencies behave in a similar way, as they lost significantly during the introduction of the first restrictions related to limiting the spread of the pandemic.

Euro and dollar

exchange rates Euro and dollar exchange rates, similarly to the Polish zloty, lost in the initial phase, only to stabilize at some point. The situation persists so far and at the moment the euro and dollar currency markets are calm.

British currency The British

currency is showing both ups and downs. High volatility is caused by investors closing long positions on GBP.

Turkish lira The

situation here is definitely unstable. The currency is still “below the mark”. The Turkish lira is in an incomparably worse situation than the zloty. Since the outbreak of the pandemic, the currency has depreciated at an alarming pace and the market has not been stable so far. Lira remains under pressure and loses against the euro and the dollar.

The currencies of many economies are at levels not recorded for years. The situation is quite unstable, hence changes in the rise or fall of currencies must be expected.

 

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