Financial markets during COVID-19 - Regal Core Markets

 

The recession brought about by the pandemic isn’t the last thing to come. In fact, the stock market has been plummeting, and contracting oil prices have already made many retail traders reassess their traditional investments and look for new opportunities.

The coronavirus pandemic has forced the government and financial markets to crisis mode, with the diminishing resources, the debt of different countries are skyrocketing, and unemployment rates going higher than the Great Depression era. Weeks after the World Health Organization declared a global pandemic; the OECD predicted that global stock markets would decline by 30%.

Even though the capital markets and industries are continually declining, the forex industry is thriving. Forex brokers all over the world have reported significant increases in monthly trading volumes in addition to new client accounts. While it’s too soon to tell, the increasing interest of retail investors can be attributed to the plummeting capital markets. Investors may also be looking for other income streams, or simply because they have more time to trade actively.

The current crisis may be one of the reasons the forex market is gaining traction, but forex trading has been increasing in popularity for quite some time now. According to the Bank for International Settlements triennial report of 2016, the foreign exchange market cap averaged $5.1 trillion per day.