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Coronavirus COVID-19 is shaping to be the most damaging pandemic of the XXI century — and we are barely even in 2020s.
100 000 confirmed cases does not sound particularly bad, until you take in other effects the virus brought to the table.
How Does Coronavirus Affect The Stock Market
In China alone, over 10% of the world population had to be quarantined, leaving the country without a large percentage of its workforce — and this in turned disrupted the supply chains for many worldwide companies.
Samsung had to slow down the roll-out of Galaxy Z Flip and Tesla’s production took a noticeable hit. Lots of car manufacturers at least partially depend on Chinese production — which is expected to be slashed by at least a quarter until the epidemic is over.
And those are big companies that have enough money to survive the outbreak — many others can not.
Lots of retailers and small businesses worldwide are suddenly left without goods they need to make money . Even the fashion industry had to go into the maintenance mode due to the factories being temporarily closed down. Not to mention the sudden PR issues — for example, Corona beer suddenly faced a massive profit loss.
And the next seedbed for the virus seems to be India — which is the other world production centre. The economies all over the world have been ground to a halt, and you can definitely see it on the Forex market.
How Does Coronavirus Affect The Forex Market
The currency value formation is an extremely complicated process, but one thing is known for sure — it heavily depends on the performance of the country’s economy. And when the aforementioned economy is in a free-fall (or even just a controlled descent), the currency value follows immediately. Which is exactly what is happening to the countries that are affected by the coronavirus.
For example, the EUR took a beating after the coronavirus has been found in Spain, which turned an already painful descent into a nose dive. Especially against the USD, which had been considered a safe haven for quite a while… until it got coronavirus too. Now the US are just trying to keep up a good facade, yet some key economic parameters are slipping back anyway.
That said, USD is not in the worst position overall — JPY suddenly lost its position of the safe haven during the global economic events and is steadily falling down, to the point where USD increased its value against JPY by 2%. While Japan/China trading relationships are not at their highest, the investors are apparently very concerned anyway and prefer to keep their money in gold.
Similar picture happens on the AUD currency pairs — Australia heavily depends on Chinese wares, to the point where most investors use AUD as an indicator of the Chinese renminbi. And the AUD is in chaos at the moment, with the RBA cutting interest rate to the record lows and still being unable to stop the devaluation of the currency.
Conclusion
The coronavirus created a very harsh, and rapidly changing, economical landscape. Right now, there are incredible profit opportunities available to the Forex traders, but all of them are fickle and incredibly risky. Any unfortunate piece of news can redirect the financial flow in a matter of minutes, and there is no way to predict them.
Still, the fortune favours the brave — and if you consider yourself one, you can make a lot of money on the coronavirus hype with JustForex . Register your account and receive an up to 115% deposit bonus to start trading right now!
About the Author
JustForex
JustForex is your one-stop broker for Forex, stock, commodities, and other financial instruments. The company has been providing its services to traders since 2012 and is extremely popular in Asian, African, and South American markets. Create an account and start trading at JustForex .
