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By aiming to understand the importance of the ongoing effects of COVID-19 on several economies, this study attempts to highlight the impact of COVID-19 confirmed cases and deaths occurring in the most affected countries of the world such as China and the USA, especially in the context of their respective currencies. For this purpose, the daily data from January 22, 2020, till May 7, 2021, has been taken into account, and then has been analyzed to examine the linear relationship between the currency and proxies of the COVID-19 pandemic. Moreover, the (autoregressive distributed lag) ARDL model has been employed in order to fulfil the research objective with numerous statistical diagnostic measures, so as to validate the model. The results indicate that the exchange rate is affected negatively due to the effect of COVID-19 cases and deaths in particular countries. Moreover, the effect of the pandemic is not limited to the short run only, but also in the long run, as it is hurting the financial backbone of China and the USA.

The outbreak of the contagious pandemic Covid-19 has disturbed various economic and business activities across the globe. This has resulted in the declination of cash flows and revenues, which significantly increases the probability of corporate bankruptcies and adversely affects the stock market performance. The current study investigated the Covid-19 and stock market nexus whilst considering the Shanghai Stock Exchange (SSX). Covid-19 active cases and deaths have been considered proxies for the Covid-19 from 1 April 2020 to 30 July 2020. For empirical analysis, this study utilised quantile regression and dynamic ordinary least squares (DOLS). Empirical findings of both quantile regression and DOLS illustrate that both the Covid-19 active cases and deaths significantly decline the SSX closing index. However, the quantile estimates reveal that from lower (0.25) quantile to medium (0.50) to higher (0.75) quantile, the magnitude of these variables is found declining. Moreover, the frequency domain causality test confirmed the unidirectional causal relationship between the study variables, running from Covid-19 cases and deaths to the SSX. The findings are robust, which leads to providing practical policy implications that identified the need to revise healthfinance-related policies and financial education to combat such circumstances in the future.

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