COVID-19 has continued to present both health and economic challenges to countries worldwide. Economically, it has led to less foreign exchange earnings among these countries, with most of them raising concern about fluctuations in their exchange rate (Maital & Barzani, 2020). Examining the impacts of the COVID-19 pandemic on the foreign exchange rate of the Canadian dollars against the US dollars can help present a picture of the situation.
The COVID-19 pandemic has weakened the Canadian dollar against the US dollar, with only slight rises being noted. Understandably, various measures regarding the control of COVID-19 spread have impacted the foreign exchange rate of the Canadian dollars against US dollars. For instance, news about new COVID-19 variants has led to variations in the exchange rates of the countries’ currencies. According to CNBC (2021), the recent announcement by Austria that it would re-impose a complete lockdown due to the surge in COVID-19 infections had a significant impact on exchange rates. For instance, the Canadian dollar weakened against the US dollar by 0.42% to 1.2652. There are no absolutes when it comes to the exchange rates during the COVID-19 pandemic, as demonstrated by those of US dollars and Canadian dollars. The Canadian dollar strengthens against the US dollars when progress has been made regarding the containment of COVID-19, which is not the case when new cases are reported.
References
CNBC. (2021). Dollar rises as COVID concerns spark flight to safety. CNBC. https://www.cnbc.com/2021/11/19/forex-markets-european-central-bank-turkey-interest-rates.html
Maital, S., & Barzani, E. (2020). The global economic impact of COVID-19: A summary of research. Samuel Neaman Institute for National Policy Research, 2020, 1-12. https://www.neaman.org.il/EN/Files/Global%20Economic%20Impact%20of%20COVID-19_20200322163553.399.pdf
