Millions of people across the globe entered a lockdown in March 2020. The domino effect that happened throughout the economy was unpreventable. Although it was necessary to put the coronavirus under control, we paid a high price for that. The economy was literally diminished by the COVID-19 but luckily, it is on the rebound now. Nevertheless, the pandemic and its impact on the economy is far from over.
The Economic Impact of COVID-19
We can’t predict exactly what the economic damage will be after COVID-19, but there is a silent agreement among the economists that it will have negative consequences.
The economic damage caused by the pandemic is mostly driven by a fall in demand. This means that fewer consumers are inclined to purchase the services and goods accessible in the global economy. This dynamic is obvious in industries such as travel and tourism.
Lockdowns across the world have become second nature to us. It definitely helped slow down the spread of the coronavirus, but the meticulous restrictions in the travel industry were the reason why airlines have lost planned revenue. The result was cutting expenses by reducing the number of flights.
Forex trading, on the other hand, was on a roll at the beginning, thanks to the resilient US dollar. FX trading experienced massive growth across different trading platforms and commodities. In developing countries, this was more enhanced. The traders’ accounts were making up to 60% of the new accounts.
This extensive growth is rare for the forex market. Because of the pandemic, workers are working from home which means they have more time to focus on trading. In addition, people are looking for new income channels. People have more time to learn everything about trading. Actually, these global events opened up new opportunities to make a profit.
This leads to finding online trading brokers. People figured out that what they need is an offshore company and a list of offshore FX brokers to start. The most popular strategy was to buy the US dollar which was the safe currency of choice among the investors and traders during the crisis. But things change fast.
The dollar is the most liquid currency in the world and the spread of the virus was more aggressive in Europe and Asia. The US economy is less dependent on external demand than Europe.
It is difficult to make any accurate forecasts. What is certain for now is that the market volatility is high. We are witnessing how things can change really quickly. At the start of the pandemic, the US dollar was unperturbed. In 2021, the US dollar came under pressure.
However, successful vaccination and the implementation of measures for economic growth helped. The FX market is operating with high awareness of risk. The fluctuation of currencies is to be expected. Social distancing and lockdown aren’t good for the market, and remote work will keep the traders interested in forex markets.
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