As the Forex market has developed over time, technology and society have also changed. It has led to a continuing shift in dynamics within the forex trading sphere, causing changes in demographics as well as the way people trade.
Trading apps
Trading apps have opened the door for amateurs to begin forex trading. All it takes is a phone and internet connection and you’re in! Once a white-collar, exclusive trading market, forex has evolved with the times. And with the increasingly available plethora of apps, forex is as easy to get into as ever. As well as getting people into the market, Apps are available for teaching purposes as well, allowing amateurs to learn the signals to look for in forex as well as comprehensive support on how to read charts and graphs.
Younger generations are forex trading
With younger generations being incredibly technologically astute, it’s not a surprise that there has been a growing trend of youngsters getting into forex trading. With accessibility from their phones, it has become a great way for young people to earn a bit of extra money on the side or even take it full time.
The pandemic
The pandemic has caused havoc amongst all parts of our lives, and the financial sector was one of them.
The foreign exchange market has been heavily impacted by the coronavirus pandemic. This is likely to continue into 2022 because of the introduction of new variants of the virus and the ongoing need to respond quickly with new restrictions. This uncertainty translates into volatility in the foreign exchange markets.
Each currency has been affected by the pandemic with some fairing better than others:
USD- It has been a turbulent year for the greenback and a much-anticipated meeting of the US Fed on December 14/15, could have a significant impact on how the dollar closes out the year. In January this year, the USD was trading at a low of 89.41, but it has recovered significantly over the year and reached a high of 96.95 in November. The news of Omicron has seen it drop back slightly and it is expected to close the year at 96.06. The outlook for 2022 is brighter with a predicted closing value of 97.33 v the 2021 expected close of 96.06
AUD- The Australian Dollar has been much more badly affected during 2021.It reached a top value against the USD of 0.7996 in February, but it dropped to a low of 0.6994 in November. The forecast for 2022 expects little movement from current values of around 0.70 against the USD.
GBP- 2021 has been a bad year for Sterling as the UK economy has battled the effects of COVID and Brexit. It reached a high of 1.424 against the USD in May but the news of Omicron in Nov saw values drop to 1.32.
The outlook for 2022 does not make good reading for Sterling, with high inflation and slow economic recovery leading to an expected value of 1.30 against the USD by the end of the year.
EUR- The Euro has displayed a similar pattern to the Australian Dollar, with a high of 1.234 against the USD in January and a 17-month low of 1.120 in November as news of Omicron came through. The forecast for the end of 2022 is that the EUR will be worth 1.11 in 12 months’ time.
Carry trades
Carry trades involve traders looking for profit from interest rate differentials between a forex pair. It has become incredibly popular due to the ability to hold a position overnight and profit from the difference between rates via a forex broker paying swaps into your account.
The pandemic has thrown a bit of a spanner in the works regarding carry trades ease and profitability but post-pandemic it is more than likely that they will be a mainstay for forex traders around the world.
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Originally published at https://sticpay.com on January 5, 2022.
