
Honors College Theses
Title
COVID-19 and the Foreign Exchange Market: An Analysis of the Pandemic’s Effect on Exchange Rates
Date
2022
Major
Finance (BBA)
Document Type and Release Option
Thesis (open access)
Faculty Mentor
Dr. William Wells
Abstract
The pandemic created by the Coronavirus (COVID-19) impacted global economies and individual lives. Millions died as a direct result of the virus. Countries found themselves caught up in a whirlwind of information and disinformation that created uncertainty within households, businesses, political factions. This study explores interactions between COVID-19 cases, political responses, and exchange rates. Foreign exchange rates serve as a proxy for global economic response to the growing number of COVID cases and political reactions and responses to the pandemic. Governmental policies can be seen as a signal of a country’s ability to prepare against the virus and protect its citizens and businesses in an effort to minimize the immediate impact and duration of the pandemic. A measurable shift in global currency exchange rates is viewed as a flight to safety following an exogenous shock or during periods of uncertainty. COVID-19 introduced both a shock and a long period of uncertainty during which we observe a move to hold U.S. dollars. The result is an increase in demand for, and an increase in the value of, the dollar.
Recommended Citation
Salim, Izabella, "COVID-19 and the Foreign Exchange Market: An Analysis of the Pandemic’s Effect on Exchange Rates" (2022). Honors College Theses. 770.
https://digitalcommons.georgiasouthern.edu/honors-theses/770