How the coronavirus pandemic has affected forex trading - Regal Core Markets

1. How the coronavirus pandemic has affected forex trading - Regal Core Markets The coronavirus pandemic has shocked the whole world and affected our everyday lives. One of the most affected is the financial world, including the forex market. Global markets have crashed, and the world’s economy may face a double recession. Currently, the global markets are trying to recover from the downtrend the pandemic has caused. But will the trend still go down? The demand for currencies has shifted across the globe because of many factors, such as unemployment and governmental action that impact several industries, including travel, hospitality, and tourism. When it comes to the forex market, China and Australia were the first countries to be affected by the virus. This is because the virus originated in China, and Australia is the biggest trading partner of China.

2. As the outbreak in China went global and spread throughout the world and has gravely affected European countries, including Spain, France, Italy, Germany, and the UK, investors started favoring the US dollar. This is because investors believed that it was a more solid option because of the Federal Reserve’s willingness to give as much liquidity to the market as possible. Moreover, the US forex market does not heavily rely on external demand, unlike Europe, Africa, and Asia. In the past, the dollar has been seen as the “currency of last resort”, which provided some security in terms of investing in the currency. However, this security hasn’t lasted long. Because of the increased strain on the dollar from health services and investors, the US is headed for an inevitable recession. This will impact the success of the recovery of the global economy.