COVID-19 has modified life on multiple levels, and today we are going to explore one of them regarding the foreign currency exchange industry. The value of different currencies has changed and, depending on your personal situation, this could represent an opportunity for you. Read on to find out more!
Currencies that have increased their value
When compared to the dollar, there are few of currencies that have strengthened their value even in the middle of a crisis:
MMK – Burmese Kyat
The official currency of Myanmar is the Burmese Kyat and, due to a series of events, it has raised its value in its own country. The context is not all favorable for Myanmar but it may open an opportunity for new investors now that the economy is starting a campaign to regain normality.
Since the tourism industry had to refrain from activities, many other businesses had to close their doors too. Furthermore, border restrictions put an abrupt stop to exportations, which affected the appreciation of the dollar negatively, while the Burmese Kyat increased its worth. The Central Bank already intervened to regulate the market but the Burmese Kyat is still growing in value slowly.
EUR – Euro
Records stated that the euro maintained a higher position against the American dollar for 12 consecutive weeks up to June. CNB informed that the global market strategist, Jai Malhi, predicts that the eurozone will recover from the Coronavirus recession faster than the UK and the U.S due to the sturdiness of the cooperative actions of the European Union. To motivate investment, the European Central Bank increased its Pandemic Emergency Purchase Program in 500 billion euros.
Other currencies that gained value during the current health crisis are the Kuwaiti dinar and the British pound.
Currencies that have lost value
Myanmar’s situation is one of a kind, apparently, because the dollar has remained strong in most countries at the moment, proving its stability even during a pandemic. This is a list of currencies that have lost their value in front of the dollar:
RUB – Russian Ruble:
Although it showed certain stability at the beginning of the health crisis of 2020, the Russian ruble started struggling and depreciating. The fact that the conversations within the organization that regulates the prices of crude oil in the market, OPEC, were not fructiferous contributed to its fall. Since March, Saudi Arabia and Russia entered a price war, impacting the Russian currency.
MXN – Mexican Peso:
Another currency that has been affected by both the pandemic and the price war has been the Mexican Peso. Although Banxico, the central bank of Mexico, attempted to reduce the peso depreciation, its efforts have not mitigated its fall as effectively as expected.
BRL – Brazilian Real:
The Brazilian real was more susceptible to the Coronavirus crisis than most currencies around the world. In the last period, it lost 4.2% of its value in comparison to previous periods, leading to cuts to the base interest rate and prompting investors to become more cautious regarding the country.
AUD – Australian Dollar:
A recent update informs that the Reserve Bank of Australia applied a group of strategies to revitalize the Australian dollar, achieving its objective mildly.
ZAR, NAD, SZL, LSL – South African Rand and pegged currencies:
To respond to the economic issues generated by the health crisis, the South African Reserve Bank decided to cut interest rates with their highest cut in over a decade, going from 6.25% to 5.25%. The daily concerns households had to face even prior to the pandemic, and that are still worrisome today and aggravated by Coronavirus, provoked the South African Rand and pegged currencies to fall 3.8%.
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