Introduction
In the past two weeks, all the currencies depreciated significantly against the US dollar amid rising fears of a global USD shortage. The greenback was sold aggressively in the first two weeks of the sell-off, but the trend reversed sharply as investors tend to generally prefer the USD in prolonged periods of elevated price volatility. As we saw recently, the USD index strengthened by 5.5% in the past two weeks, its biggest two-week change since April 1986.
Interestingly, one particular currency that has been performing poorly in March has been the British pound. Figure