Given its spread across borders, the COVID-19 global pandemic could be described as an equalizing force, at least from an economic perspective. Yet, considering its influence on foreign exchange rates, the pandemic’s economic impact has not been shared equally.
The U.S. dollar index, a measurement of the relative strength of the dollar against a broad basket of foreign currencies, has risen more than 4 points since the start of this year, from 0.96 to 1.00.
It is interesting to evaluate the strength of the dollar against two of its closest trading partners, Mexico and Canada. The Mexican peso has fallen by 25 percent vs. the dollar since the start of the year, reaching an all-time low. The collapse of crude oil pricing hit the Mexican economy particularly hard.