The Effects of the COVID Pandemic on the Currency Markets

Every major global crisis, pandemic, military conflict, natural disaster, and political upheaval affects financial markets, particularly the values of international currencies like the dollar, the euro, the yen, and many more. What has been the impact of the COVID pandemic on the world’s currency trading? One might assume that bad news, like a viral pandemic, would always have negative effects on all markets, but that is not the case. Human behaviour is hard to predict, and the recent pandemic was unique in many ways. Not only were millions of citizens forced to stay in their homes and cease working, but there was a new surge of online work, computer-based investing, and other behaviours that deeply changed the world economy, perhaps forever. Here are some of the main ways global currencies were affected by the recent medical crisis.

Home-Based Trading Flourished

In the U.S. and Europe, many workers spend at least a portion of each workweek as telecommuters. This was true even before COVID struck. Now, with the vast population of people either unemployed or working from home full-time, the face of investing has changed as well. For example, anyone who uses the popular trading platform, Metatrader 4, can take advantage of the at-home time to focus on the rapidly changing values of international assets, like the dollar, euro, yuan, and others.

Not only does MT4 offer a fully secure platform for buying and selling multiple types of assets, but it’s also ideal for forex enthusiasts who keep a close eye on financial news and make numerous transactions per week. With advanced charting, automated functionality, and enhanced speed, MT4 users can turn a negative aspect of a social emergency into a profitable opportunity.


The early months of the crisis saw some historic levels of volatility in forex and other kinds of financial exchanges. Since the beginning of the summer months, when infection rates slowed across the globe, some of the wild price swings have died down. One unexpected result was that many people took advantage of the wild price changes to pull short-term profits from the foreign exchange markets. There were also plenty of losses, but whenever values begin to rise and fall sharply and unpredictably, a certain contingent of people can’t wait to get in on the action.

A Fast Turnaround

What looked to be a year-long crisis has turned around sooner than many expected. Now, with most of the international shakeup beginning to settle down, much forex activity has returned almost to normal. A key feature of the entire crisis is the newfound ability of individuals to buy and sell financial assets from their homes, via a simple computer connection. In previous crises, whenever large numbers of workers were forced to remain home during wars or local viral situations, they were unable to transact the business of any kind.

The dominance of the Dollar

A major result of the recent virus situation has been an emergence of the U.S. dollar as the world’s central, most stable form of money. As the pandemic eases, and people all over the world begin to feel comfortable investing in their currencies, the dollar will likely continue to fall back to its pre-COVID levels.

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