US Dollar Approaches COVID-19 Pandemic Peaks

The US dollar is near its coronavirus or COVID-19 pandemic summit this week. This foreign exchange development comes as investors seek safety at this time due to the factors caused by various geopolitical events.


We find it important to inform our readers today about the developments in the US dollar. We know that the official currency of the United States’ status considerably impacts people’s day-to-day lives.


We think this latest forex report about the US dollar will aid our followers who hold units of this currency or other foreign currencies and want to exchange their money and understand how they will manage their funds this week.


According to the news posted online by Vietnam-based news outlet VnExpress International, the US dollar stood at its highest level yesterday, Tuesday, April 26, since the early days of the coronavirus or COVID-19 pandemic.


This status of the United States’ official currency involved itself heading for its best month since 2015. Support comes from safe-haven flows which slowing growth in Europe and China have fanned, and US interest rate hike prospects.


The US dollar index gauges the greenback versus a basket of six major currencies. It sat by its overnight high of US$102.37, which is the strongest it has been since March 2020, when the COVID-19 pandemic’s early stage set off an international scramble for greenbacks.


Analysts from financial firm Citi remarked that the US dollar, which often serves as a haven during periods of unsettled markets and geopolitical uncertainty, is currently the hedge in markets. Meanwhile, commodities like gold are not working as effectively anymore.


The Citi analysts added that the US dollar is “quality carry” and offers more yield than any other safe haven foreign exchange alternatives. As for the Chinese yuan, it is down over 3.5 percent for this month.


In offshore trade, the renminbi was under pressure at 6.5902 Chinese yuan per US dollar. The euro plummeted below its COVID-19 pandemic lows to US$1.0635 in early trade.


This five-year trough is on anxieties for Europe’s growth and energy security following Russia’s Gazprom citing that it would stop gas supply to Bulgaria and Poland later in the day.


Like the Chinese yuan and the euro, the British pound sterling’s value has headed southward to over 2 percent on the US dollar this week.


This development happened as soft retail sales data has prompted a rethink of the United Kingdom’s interest rates outlook. The British pound sterling hit a fresh 21-month low of US$1.2560 today, Wednesday, April 27.


We think this news about the US dollar’s value coming closer to its COVID-19 pandemic peaks is favorable news for people holding units of this foreign currency, especially those who would be exchanging it for other foreign currencies.


Consumers holding US dollar units have their foreign currency as the main beneficiary of investors’ flight to quality early this week. They can relish buying more products and services with their money.


Nevertheless, at this time, many geopolitical factors impact nations’ currencies, sending their values southward.


Among these aspects affecting foreign exchange rates are the US Federal Reserve System’s monetary policy rhetoric, the Russia-Ukraine armed conflict, and the expanding COVID-19 lockdowns and restrictions’ threat to the Chinese economy, among many others.


Therefore, we advise those who do not possess units of the United States’ official currency to be patient at this time.

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