The fate of the US dollar could be closely linked to the fight against the Coronavirus, according to new research. The analysis comes as a result of the dollar’s apparent weakness in recent weeks as COVID-19 cases in America continue to rise.

The dollar’s strength or weakness is obviously tied to the U.S. economy, and the economy is closely linked to the effects of fighting the COVID pandemic. According to Amundi Pioneer manager Paresh Upadhyaya, these links can be an excellent way to gauge economic stability:

As cases in the U.S. have picked up, that’s a flag for the dollar. Because currency is the perfect reflection of relative value, we use that to gauge which region is having a better handle over the virus.

Dollar Giving Mixed Messages

The analysis is reflected in the substantial decline in U.S. GDP, which dropped an annualized 32.9% last quarter. However, while Europe appears to have contained the virus better, GDP in EU nations fell harder.

An even more confusing message appears to be the link between a weak dollar and a strong stock market. The NASDAQ closed at a new all-time high during Monday trading, but the dollar remained weak.

The connections are therefore tenuous at best and may indicate a deeper problem with the dollar. Should the dollar continue to languish, the current economic recovery could be extremely short-lived.

Getting out of Dodge

The anxiety over the global economy has led to substantial increases in other assets. Funds move out of places of risk, and the dollar’s decline of more than 10% from highs indicates fundamental weakness.

During that same period, assets like gold, silver, Bitcoin, and Ethereum have seen substantial upticks. The flow indicates a movement away from weakening national currencies into more stable safe-haven assets.

Bitcoin’s bull run over the past two weeks has largely coincided with the dollar’s losses. The movement also reveals that many investors see the US economy as a source of risk. Should a vaccine remain elusive, or COVID cases continue spiking, fears will likely remain.