COVID-19: What’s the Impact on Forex trading?

What is Forex Trading?

Forex trading is a foreign exchange market. Simply put, it is a market where foreign currencies are exchanged. This market exists to conduct international business and trade worldwide either through the desire to purchase something from another country or foreign travellers needing to use local currency.

The Forex market, as it is understood today, is a relatively new market. It has, of course, existed for as long as people have needed to exchange currencies. However, its modern form as an electronic network is no longer centralised. In its current form, currency trading is conducted electronically over the counter’ (OTC), meaning transactions occur through computer networks between traders globally.

The Forex Market is open 24hrs a day, five and a half days a week and currencies are traded worldwide in major financial centres across major cities allowing the market to be active any time of the day.

How has the COVID Pandemic Affected Forex Trading?

With the world going in and out of constant lockdowns, we have all watched traditional businesses suffer and have to adapt to a new way of doing business. Online businesses and brokers, in particular, have become increasingly important in keeping our economies afloat, seeing an increased interest in the relationship between COVID-19 and Forex Trading. In addition, as people worldwide search for alternative sources of income, people are starting to show greater interest in Forex Trading.

The Paypers reported in August 2020 that there had been a 300% growth during the pandemic, and most growth was reported in developing countries. This is an enormous amount of growth for an industry that has only seen an increase of 40% over the previous decade. With an increase like this, it will be essential for brokers to quickly develop systems to deal with the influx of new clients.

How the Chaos of COVID Saved the Forex Market

COVID-19 has left the world in turmoil. Some industries have coped better, as have some people. We have watched people scramble together to find alternative incomes and ways to survive in a situation that most of us have never experienced. “Some sought solitude in Netflix binges whilst the more savvy ones decided to take matters into their own hands and educate themselves in the forex market.”  People have turned to Forex Trading as a way to either replace their lost income or top up on what they’ve lost during this pandemic, and it was exactly what this industry needed!

The forex industry has had a tough couple of years. However, it would appear that COVID-19 has completely resuscitated it while presenting opportunities for individuals who have found themselves out of a job. Of course, this is not to take away the devastation that COVID-19 has had on the world, but it is good to know that this influx in Forex Trading has revived a struggling industry and created an opportunity for people in need.