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#1 02-08-2020 20:49:31

johnedward
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From: Paris - France
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Coronavirus: forex brokers forex preparing for a 2nd wave in the US

Coronavirus: forex brokers forex are getting ready for a second wave in the US


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For many, the beginning of 2020 has been a nightmare, mainly because of the virus situation. It shook both brokers and traders alike.

The economic impact caused by the pandemic is apparently worse than the financial crisis that hit 12 years ago. Indeed, in the first month, the world's major stocks suffered massive declines. Other markets, including futures, indices and oil, were also affected as oil prices entered negative territory.

While the markets felt the negative impact of the virus situation, the forex actually experienced a significant increase in trading volumes. As a result, forex brokers saw their revenues or earnings increase sharply during the first 3 months of the year.

Virus cases continue to increase worldwide and there are growing fears of a new wave of infections. Many countries that currently have a high number of reported cases are vulnerable to this, and the US is no exception. How could this affect currency trading there? How can forex brokers prepare for a new wave?

Is a new pandemic wave in the US possible?

Recently, a new wave of confirmed cases has been reported in the U.S., including several emerging hot spots. This has reinforced new fears of a new wave of the disease there.

However, several leading doctors have stated the opposite, that the US is in fact still in its initial wave. According to White House adviser Anthony Fauci, the initial wave will not stop until the number of cases reaches single-digit numbers.

That being said, it is not yet certain that we will see a new wave of the virus in the US. But if there were to be a new wave, we also cannot be sure how it would affect the American forex industry as a whole.

Forex brokers need to plan for the future. We have seen an increase in trading volumes for brokers around the world in this year's first quarter. But in the second quarter, volatility eased. But several forex trading service providers saw a turnaround in trading volumes 2 months ago.

With the increase in trading volumes, the number of virus cases worldwide also increased, with more than 12 million positive cases.

Are brokers ready for increased volatility?

It is also questionable whether we will ever see a new wave of confirmed virus cases, not only in the US but also in other countries heavily affected by the pandemic. It is therefore important to know what forex brokers are doing to prepare for a possible increase in volatility.

Pavel Spirin, a director at Skilling (a newer broker), said that they have a solid infrastructure that is able to minimise any negative impact on its clients' operations. He said that constructive communication is in place to prepare clients for any adverse market conditions.

Denis Golomedov, a manager at RoboForex, stated that the company is preparing for any possible volatility and instability of financial markets. However, the probability of experiencing the level of volatility we observed in the first quarter is very low.

Where will traders and investors go if volatility returns?

Denis Golomedov also said that if such volatility returns, forex traders and investors are likely to put their money in safe assets, such as gold and silver. Traders may also be interested in safe-haven currencies such as the dollar, the yean and the Swiss france.

However, if high volatility presents enormous profit potential, it is best to stay alert to market news and trends. The market can be too aggressive, so traders should always develop a solid strategy before, during and after a trade.

For forex brokers, whether a new wave occurs or not, they must be able to meet the needs of their clients. They must strive to be more proactive and innovative in order to provide only the best and safest trading experience. Many brokerage firms have focused on digital platforms to offer educational resources, including online workshops and webinars.

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