COVID-19: Which Markets are Safe to Invest in Foreign Exchange?

Forex. Photo by Austin Distel on Unsplash

Countries all over the world are going through quite a tough time at the moment as coronavirus continues to grow and spread – but there are also opportunities to be found in markets that are in turmoil as we are seeing some deal with the current events a little better than others. Whether you’re an experienced trader in the market, a relative newcomer on the hunt for forex trading lessons, or indeed somebody who wants to give forex trading a go off your own back – now is a perfect opportunity to get involved, as we may not see prices change in the way they currently are.

The basics for those just starting out – forex trading is all about buying and selling currency pairs, the Euro vs the United States Dollar for example – in many instances it may be important to understand how the exchanges are impacted by things such as trade disruptions or global events such as the ones we are going through – the trade disputes between the US and China, or the ongoing transition for Britain as it prepares to leave the European Union serve as good examples – although the current situation we are in will not last forever, and unlikely to be repeated, it does help serve as a reminder that preparation can go a long way toward protecting you, even through an unforeseen global crisis such as the coronavirus. So with that in mind, which forex markets are presenting themselves as opportunities currently in 2020, and if you’re a newbie to the trading platform, where can you get started?

USD/EUR – Considered to be the most popular pair, and for good reason – they’re very familiar as both are amongst the biggest markets in the world. The USD/EUR pair would aptly be described as low risk, the prices tend not to fluctuate too much, so they can be invested in without having to worry too much about how it will change over time. This is also a trade with a wealth of information available, if you are just getting started out, it can serve as a good learning experience that will help prevent you from making any beginner errors.

During this time of uncertainty, this may very well present itself as an opportunity – the USD is currently performing extremely well despite what is currently happening with the US – but as we gear up to see how they will handle the crisis on their doorstep, that might change. On the other hand, whilst Europe is going through some tough times particularly in Italy and Spain, the market hasn’t taken too much of a hit and has managed to stay relatively stable throughout – good news for those looking for longer-term investment and safety, but if we do see a shift with the USD, it opens the door a little.

USD/GBP – Another of the extremely popular pairs, however, this one is considered to be more volatile than the previous – much like the euro and the dollar, there are vast quantities of information available to you for this pair meaning that you’re never lagging on information – and also much like the previous pair, the UK has been taking a little hit but as they move through the crisis are fully expected to recover from it.

EUR/GBP – Another that could be viewed as a little more volatile, especially as we move through the Brexit transition period – but as it stands currently may provide a good opportunity – those who are panicking are having an impact on the market, but that is unlikely to last for an extended period of time – those who would like to establish a long position may be in luck, and find the potential to capitalize on a sliding market before it begins to prop itself back up.

This is an extremely uncertain time for all involved, however, as nobody can predict with any accuracy what may happen over the next few months – some analysts predict that these choppy trends in the market could continue through until summer, when we may see things return back to normal. The very optimistic outlook by some that we could start to look toward moving past this by Easter Sunday seems very much a fantasy, as each day we begin to understand that many are only now getting to the peak of what to expect.




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