The coronavirus pandemic has swept through the markets like a horseman of the Apocalypse. While some countries managed to halt the spread of the virus, others are still struggling with the growing number of new cases. Besides, virologists forecast a second wave of the pandemic. For this reason, investors are now more cautious than ever as the situation is in the market as changeable as the wind. It seems that a vaccine could help to boost morale not only among people but the market as well.
Investors who trade Forex are more exposed to losses due to the pandemic. The devastating consequences of the virus still affect the global market. Currency quotes change drastically either moving up or crashing down unexpectedly. In addition, any news about the pandemic has a direct impact on them. Moreover, the slowdown of the global economy, as well as the dovish monetary policy of the world's leading regulators, are also weighing on the currency market. The US Federal Reserve's recent actions, namely the QE program, large money injections, and broad stimulus measures, dragged down the greenback, especially against the euro. At the same time, the European Central Bank would also weaken the European currency. However, this is not possible taking into account the current soft policy of the Fed.
This is why many experts are sure that with the appearance of a vaccine against the coronavirus, the currency market would finally shrug off fears caused by uncertainty and high volatility. As for now, currency quotes are likely to remain rather unpredictable and volatile.
