CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved.

What is the impact of coronavirus on currency pairs?

Coronavirus has impacted markets around the world, from real estate to stocks to forex. Here, we’ll explain the impact of coronavirus on currency pairs, and which have been the biggest winners and losers.

What’s happening with the US dollar?

The US dollar (USD) has seen increased volatility during the pandemic, as have a range of leading currencies including the euro (EUR) and British pound sterling (GBP). But, as the world’s unofficial reserve currency and a ‘safe haven’, USD has performed better than some other currencies, as investors are still readily buying USD throughout the pandemic.

For example, USD has actually appreciated relative to GBP, the New Zealand dollar, the Canadian dollar, Mexican peso and the South Korean won. But, it has underperformed against other popular currencies, notably the euro and Swiss franc – which are themselves safe-haven currencies.

In the sections that follow, you’ll be able to see the ten USD currency cross pairs that have strengthened and weakened the most according to the performance of the USD against the base currency.

For reference, there are always two currencies in a currency pair. The base currency is the one on the left, and the quote currency is the one on the right. The price that is given for a currency pair is always how many of the quote currency it would take to buy a single unit of the base currency.

As an example, in the CHF/USD pair, the Swiss franc (CHF) is the base and USD is the quote. As the pair rises in price, it means that USD – the quote currency – is weakening against CHF, because more dollars would be required to buy a single Swiss franc.

Top 10 best performing currency pairs

The table below gives the data for the best performing USD currency cross pairs from 31 December 2019 to 31 July 2020. These pairs include base currencies that strengthened against the USD.

Pair Currencies included Gain
MMK/USD Myanmar kyat/US dollar +7.4%
SEK/USD Swedish krona/US dollar +6.7%
CHF/USD Swiss franc/US dollar +6.0%
DKK/USD Danish krone/US dollar +5.4%
RSD/USD Serbian dinar/US dollar +5.3%
XAF/USD Central African CFA franc/US dollar +5.2%
CVE/USD Cape Verde escudo/US dollar +5.2%
BGN/USD Bulgarian lev/US dollar +5.0%
EUR/USD Euro/US dollar +5.0%
KMF/USD Comorian franc/US dollar +5.0%

Top 10 worst performing currency pairs

The table below gives the data for the worst performing USD currency cross pairs from 31 December 2019 to 31 July 2020. These pairs include base currencies that weakened against the USD.

The Venezuelan bolivar is sitting at a 100%> loss because the currency experienced a negative increase of 4099% inflation from July 2019 to July 2020.

Pair Currencies included Loss
VES/USD Venezuelan bolivar soberano /US dollar -100.0%>
SCR/USD Seychellois rupee /US dollar -28.3%
ZMW/USD Zambian kwacha/US dollar -23.1%
BRL/USD Brazilian real/US dollar -23.0%
AOA/USD Angolan kwanza/US dollar -19.0%
LSL/USD Lesotho loti/US dollar -18.0%
ZAR/USD South African rand/US dollar -18.0%
NAD/USD Namibian dollar/US dollar -18.0%
SZL/USD Swazi lilangeni/US dollar -18.0%
ARS/USD Argentine peso/US dollar -17.4%

Popular USD cross performance

Contrary to the previous two sections which give the ten absolute best and worst US currency crosses from 31 December 2019 to 31 July 2020, the table below gives the performance of ten popular USD currency crosses – and whether the US has strengthened or weakened relative to the other base in the pair.

A gain indicates that the USD weakened against the base currency in the pair, and a loss indicates that the USD strengthened against the base currency.

Pair Currencies included Gain or loss
CHF/USD Swiss franc/US dollar +6.0%
EUR/USD Euro/ US dollar Euro +5.0%
JPY/USD Japanese yen/ US dollar +2.6%
AUD/USD Australian dollar/US dollar +1.7%
HKD/USD Hong Kong dollar/ US dollar +0.5%
GBP/USD British pound/ US dollar -1.3%
NZD/USD New Zealand dollar/ US dollar -1.6%
CAD/USD Canadian dollar/ US dollar -3.1%
KRW/USD South Korean won/ US dollar -3.1%
MXN/USD Mexican peso/ US dollar -15.0%

How coronavirus has impacted the forex market

The full impact of the coronavirus on forex still remains to be seen. Commodity currencies like the Australian dollar, New Zealand dollar and Canadian dollar all felt the effect of early lockdowns and reduced demand for minerals, oil and other commodities upon which the strength of these currencies rely heavily.

But, certain ‘safe-haven’ currencies like CHF, EUR and the Japanese yen (JPY) have all strengthened relative to the dollar during the coronavirus, which is interesting to note.

Some put this down to the fact that the virus has had a significant impact in the US, which was leading the world in terms of confirmed cases and deaths at the time of writing (14 September 2020).

But, the fact remains that aside from USD, these currencies – CHF, EUR and JPY – are all considered safe havens in their own right. So, they might just be considered a stronger store of value during the pandemic than USD, which as the world’s unofficial reserve currency tends to be more susceptible to fluctuations. This has caused USD to weaken in these pairs.

What will be interesting going forward is the level of fiscal stimulus that central banks deem necessary to implement – especially in the face of a second wave.

Looking ahead

The outlook for forex is mixed, and the prospects for each pair will depend on how quickly life and economic activity returns to normal. Plus, the outlook for the forex market in general is hard to gauge because as one currency in a pair strengthens, the other will weaken – meaning that each pair needs to be looked at on an individual basis.

It’s worth stating that with recessions largely in effect around the world, including the US and UK, currencies could experience a decline looking ahead into the latter months of 2020 and beyond. You should keep an eye on interest rates – particularly in the US – over the coming months as central banks take steps to offset the effects of recessions.

Lower interest rates indicate that a currency might lose value, while higher interest rates indicate that it might gain in value – relative to other currencies that it’s paired with.

How can you take advantage of volatility in the forex market?

  1. Create or log in to your trading account
  2. Search for the currency pair you want to trade
  3. Choose your position size
  4. Select ‘buy’ to go long or ‘sell’ to go short
  5. Confirm your trade and monitor your position

You can take advantage of volatility in the forex market by trading forex pairs that stand to either gain or fall during the pandemic.
If a pair stands to gain – meaning the quote will weaken relative to the base – you’ll want to go long.

If a pair stands to fall – meaning the quote will strengthen against the base – you’ll want to go short. Financial derivatives like CFDs are useful products to use to go long or short because they let you speculate on an asset’s price movements without having to own the asset directly.

We’re the world’s No.1 CFD provider1, with educational resources like IG Academy to help you learn all about the markets. Plus, our expert support is here for you 24 hours a day, and our award-winning platform2 is available on desktop and mobile, so you can trade wherever you are, whenever you want.

Create an account to trade forex today. You’ll be able to go long or short, and trade 24 hours a day3 – with high liquidity and constant opportunities on a wide range of forex pairs.


1Based on revenue excluding forex (published financial statements, June 2020).
2Winner of ‘Best Multi-Platform Provider’ at the ADVFN International Financial Awards 2020.
3Excludes the hours from 11pm Friday to 9am Saturday (Swiss time).

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

React to global volatility

Market volatility continues as coronavirus dominates the global agenda. Trade with us to take advantage of:

  • Tight spreads – from just 1 point on major indices, and 2.8 on US crude
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