The world is facing an absolutely unprecedented crisis. The year 2020 started off with sad news of a major virus outbreak in China’s Hubei province. Home to over 58 million people, the region soon was surrounded by chaos and uncertainty while the unknown
virus had already started spreading across the country. Shortly after the news broke out of China, the entire capital of the province, Wuhan, with a population of more than 11 million people went under strict lockdown. In efforts to contain the virus, many
measures were taken both within and outside of China. However, the novel coronavirus infection proved to be more challenging than many around the globe initially anticipated.
Due to geographical proximity, COVID-19 first spread into other Asian countries. However, it failed to spread immensely in countries like Japan and South Korea. Many experts in the field now even say that these countries set unbelievable track record examples
for the rest to follow. Their success was determined by wide testing from the very early stage of the spread while imposing certain measures but keeping the economy up and running. Japan and South Kore, despite reporting their first confirmed coronavirus cases,
are now among some of the least affected countries in the world. 2 months on from the official declaration of coronavirus pandemic by the World Health Organization, many nations re still failing to contain the spread.
The real panic started as the virus entered Europe and the United States. With the first recorded cases at the end of January, governments hoped that a widespread outbreak could have been avoided. They were quite wrong as the new coronavirus infection started
to spread largely across Northern Italy, in the Lombardy region. This area is an economic powerhouse and a major commercial hub not only for Italy but also for Europe as a whole.
With the number of cases rising rapidly, the Italian government imposed a nationwide lockdown. With this, the country became the first in the world to do so. It did not take the virus long to repeat the Italian scenario across Spain, France, and other European
countries. Along with the human cost, came the economic one as well. Markets received major shockwaves as the news about the British PM’s positive COVID-19 test made headlines across the globe. He even had to spend a few nights in intensive care, later saying
the death announcement was being prepared in Number 10 while he was in the hospital.
The global economic driving force, the United States now is the most affected country on earth. Many blame the government and President Trump for the late response as they had intended to keep the economy open. As a result, the United States now has over
1.3 million recorded coronavirus cases, accounting for roughly one-third of the global number.
The economic cost and financial firms under lockdown
The global economy is taking a massive hit from the coronavirus pandemic. With the vast majority of the population staying at home, businesses are left in a standstill. In many nations around the world, all non-essential businesses are closed. In others,
public transportation is unavailable, leaving people without any means to travel to work.
Under such circumstances, the digital financial industry is truly thriving. Forex trading is most certainly one of the biggest winners of this crisis and the coronavirus effect is expected to have a long-lasting impact on its lucrative nature. During the
pandemic, due to major shifts in currency values all around the world,
FX spreads are wider than ever before. Millions of people around the world are hitting digital financial platforms to trade with currencies in an attempt to save their assets or to make some extra cash.
In general, as social distancing remains the main health advice of government authorities and international organizations, digital platforms are seeing massive success. Companies like Zoom have experienced overnight success in real terms as the
platform’s traffic increased more than tenfold throughout the lockdown. Therefore, the digital nature of financial trading platforms contributes to its success under such circumstances.
However, that most certainly is not the only reason why Forex is expected to come out a winner out of this situation.
Currencies are falling and the market is taking advantage of it
Many of the severely affected countries without strong economies have experienced great and sudden financial downfalls. With tens of thousands of infected patients in hospitals across the country, it is sometimes difficult to keep the currency strong. Shockwaves
and foreign influence, as well as big corporations’ decisions influence sovereign currencies and their price. Consequently, currency shifts impact those using it, hence citizens of a particular country.
This was the case in Iran which became a hotspot of the virus soon after it broke out of Mainland China. This middle-eastern nation came under global attention along with Italy as the situation in both countries developed simultaneously. However, unline
Italy and others within the Eurozone, Iran does not have a back of other powerful nations and one universal currency. Instead, it is a country in a conflict of some type with many nations around the world. Therefore, its currency struggled a lot amid the virus
As the general population’s trust in government and its endeavors is utterly low, many people panicked and decided to buy as much of strong foreign currencies as possible. Wealthy Iranians who could afford it purchased British Pounds or Euros, as well as
Swiss Francs. All of these were happening through Forex platforms, particularly using Brokers from neighboring Pakistan, where the industry is much more developed than in Iran.
Such scenarios were also common in other hard-hit countries outside of the EU. Therefore, the current state of financial trading companies is not determined solely by their digital features. Instead, demands that were put upside down, as well as many global
events have shaped the sudden success of this industry.
The vaccine for COVID-19 is months away from now. As a result, social distancing rules remain in place in almost all countries. Without the foreseeable
end of this unprecedented pandemic, the state of affairs is expected to remain unchanged for quite some time. Therefore, digital financial platforms should expect an extended period of immense profits.