2020 continues to be tumultuous for the global economy, as impacts of conditions throughout the year come due, and new issues emerge to impact markets. Below find our summaries of some of the month’s biggest changes in foreign exchange.
2020 has been a devastating and unpredictable year for the global economy as we wade through the deepest global recession since the Second World War. Widespread lockdowns, the oil price war rolling into the collapse of demand, and the devastation of hospitality and tourism industries have all created an unprecedented and uncertain start to the second decade of the 21st century.
Cost of living index adjustment is driven by changes in the purchasing power of an assignee in the host location. The purchasing power is based on both the exchange rate and inflation, relative between the home and host countries.
On July 15th here in my hometown, Hong Kong enacted its most stringent Covid-19 lockdown to date. The number of cases here has continued to rise over the past ten days with many of the new infections are coming from unknown origins.
2020 has been a year of historic economic upheaval. Shocks in the market have impacted trade, inflation, employment, national budgets—sparking an unprecedented global recession to which even stable economies are not immune.
While the COVID-19 pandemic continues to disrupt global markets, depreciation has slowed in many locations and some currencies are beginning to recover lost value. Let’s take a look at some notable currency movements of the past month.
On 21 May 2020, the Chinese government proposed enacting a new law in Hong Kong on national security regulations, under the provisions of Annex III of its basic law. This proposal, while lacking many details, has created speculation and concern regarding the impact it may have on the political and business environment in Hong Kong.
On Sunday, May 3, Hong Kong recorded no new cases of COVID-19 and 14 days straight with no cases of local transmission. As the COVID-19 crisis has begun to abate in the city, the protests that rocked Hong Kong for many months have begun to resurge. The big question is “what’s next for Hong Kong?”
The COVID-19 pandemic continues to wreak havoc in global markets. In addition to the economic impacts of national lockdowns, travel restrictions, rampant unemployment, slack demand for consumer goods and sharply reduced business activity, the volatility of the oil market has reached crisis levels. While OPEC members agreed to cut production in May and June by 23% earlier this month, oil futures have continued to fall and darken outlooks for the global market this month. Crude oil prices went negative for the first time in history this month due to deficient demand for oil and looming lack of global storage capacity.
AIRINC has been providing weekly updates to spot rates of major currencies on our COVID-19 landing page. The global spread of the COVID-19 pandemic and its economic impacts landed a major blow to the global economy last month, made worse in light of volatility in oil markets sparked by controversy within OPEC+. The result has been historic depreciation in even traditionally stable currencies and unprecedented uncertainty. The last week of March saw unprecedented depreciation. While year-to-date depreciation of many currencies remains high, several major currencies saw an appreciation bump last week between April 6-13.
