Which economies are emerging stronger from the pandemic – and which currencies are worth exchanging in forex trades?
The COVID-19 pandemic has resulted in huge, sweeping challenges and changes across the board for people all over the world. The global economy has also naturally felt these shifts. This means that anyone deeply involved in forex has had to keep a close eye on the way that markets have been dipping and rising more than ever before.
There is already plenty that you need to be careful about when dealing in forex. You not only need to be a keen market watcher, but you also need to ensure that you avoid scam brokers. It’s safe to say that when you deal in international exchanges, there’s always going to be some tension.
While COVID-19 is still a very real threat, it’s clear that there are some territorial economies slowly emerging from the crisis. We have all felt the pinch, from trading all the way down to personal finance. Let’s consider a few currencies you may wish to start pairing again on your return to forex.
USD is still very much the global standard. Despite the fact that the US, at the time of writing, is continuing to have more COVID-19 cases than any other country, this hasn’t stopped the dollar from holding firm.
That’s largely thanks to the fact that it’s still seen as the ‘default’ currency for many territories. It’s remained strong through all manner of crises. Even amid COVID-19, there is still interest in USD to the extent that it has a firm place in most forex pairings.
That said, it’s worth keeping a close eye on what happens to the US in the coming months. The economy here has taken a hit, but we can at least expect USD to stay firm in the months to come. The US is positioning itself for a slow recovery, which is worth keeping an eye on.
South Korea may not be the first country you think about when it comes to forex. However, its response to, and recovery from, COVID-19 thus far clearly indicates that its economy is very likely to follow suit. It’s ahead of the pack as far as much of the Eastern markets are concerned, though Japan and Thailand are also recovering strongly.
South Korea is in a position alongside Taiwan and Vietnam where it’s readily invigorating the local economy once again. Positive press regarding the way that it handled COVID-19, at least thus far, really hasn’t hurt its chances of bouncing back financially, either.
Again, New Zealand may not be the first economy that people think of when it comes to forex trading. However, the country is arguably leading the way in terms of handling the pandemic. It has only recently started seeing cases rise again after carefully locking down and shutting out the worst of the virus early on in the pandemic.
Therefore, it may be worth looking down under in terms of forex trading, especially if you are considering pairing USD or even the shaky GBP to bolster a little strength. We will need to see how New Zealand responds to its latest cases, but many are confident that its process has been a firm act to follow.
EUR, surprisingly, is likely to be a good choice for forex trading mid-pandemic. This is despite the fact that territories such as Italy were so badly hit by the virus at the start of the Western spread, and the fact that, at present, Spain seems to be suffering spikes in cases.
Italy, in particular, seems to have hit upon a strong economic strategy, not dissimilar to the way that Greece, Hungary and Poland are managing things. It has introduced more mobility to trade off a quicker recovery, and what’s more, other European territories such as Norway, Denmark and Ireland are taking things particularly carefully.
Germany’s approach to COVID-19 was widely praised, and it’s among the most cautious when it comes to completely reopening its economy. However, slow and steady is very likely to win the race in these circumstances, meaning that you may wish to keep an eye on EUR in forex pairings soon.
No absolute wins
At this point, many territories are seeing some case and death stability regarding the pandemic – while others, such as the US, Brazil, Mexico and Spain, continue to struggle. As COVID-19 is such a difficult entity to plan for, it’s crucial that traders keep an open mind.
Safe bets at this time will be Australasian currencies as well as the euro. At the time of writing, the UK is heading into its deepest-ever recession, meaning that you may wish to hold off GBP for the foreseeable.