The coronavirus didn’t just affect the lives of people from different parts of the world but the Forex market as well. As the outbreak continues to threaten the lives of people while countries are doing their best to protect the people, without a surprise, it has been affecting the global foreign exchange market and Forex Trading.
To be able to check on the effects of COVID-19 on the Forex market, it is best if we look back on how it started.
Even since the first reported case in Wuhan, China way back December 2019, the virus has been spreading all across the country at an alarming rate by January and February the following year. By February 9, 2020, the number of deaths has surpassed the SARS epidemic last 2002-2003.
Over time, the cases started to spread to other countries particularly in Asian countries like South Korea, Taiwan, and Japan. Soon it spread to Europe, North America, Middle East, and Australia. As the number of confirmed cases rose, the World Health Organisation (WHO) declared that the 2019 novel coronavirus as a pandemic.
By the end of March, Asian countries and China slowly recovered from the virus with fewer cases reported every day. However, in Europe, the number of patients drastically increased making them the new epicenter of the virus. Despite the strict implementation of preventive measures, the virus is continuously spreading and the long-lasting effect of this pandemic is yet to be determined.
In the United States, the number of cases continues to grow, and the WHO is eyeing for the USA to become the next epicenter of the virus.
The Impact of the coronavirus in Australia and China
Since the start of the year, the Forex market has become volatile and unpredictable. As the outbreak of coronavirus in China shifts to global, so as with the effects on the world economy. Naturally, China was the first to get affected on the Forex market and Forex Trading after news about the virus broke out. Because of this, the Australian dollar was also affected considering that China is their biggest trading partner. Cases were soon reported in Australia by late January, resulting in a decline in their rates.
The Crisis Arose in the European
After some time, the death toll in Italy surpassed China’s. Other countries like France, Spain, and Germany are also having a huge increase in the number of cases. The EUR/USD has been going down since then.
The European Central Bank (ECB) said that they will be injecting €750 billion into the economy, to help with the financial fallout due to the coronavirus. However, the move only took a small effect to boost the confidence of investors, especially those who favor USD as a stable currency.
The United States Crisis
The realities sink in even after the effort of the Federal Reserve as the number of positive cases raised in the United States. Additionally, their slow reaction to the virus means that they could also recover slowly. Economist think that the recession in the US could hinder the recovery of the global economy