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As COVID-19 brought economies everywhere to a screeching halt in early 2020, currencies across the globe became highly volatile, creating a high risk but an exciting market for forex traders. In 2021, vaccination and improved public safety measures helped economies gradually reopen, and markets are starting to return to normal. Here’s what analysts think that return to normal might mean for forex traders.
U.S. Dollar and Euro Will Rebound in Second Half of 2021
After a rocky start to the year as the Federal Reserve continued to delay interest rate hikes, the U.S. dollar finally started to strengthen in June. While the Federal Reserve still hasn’t raised interest rates, increased vaccination rates have allowed for a quick return to normal economic activity.
The euro, likewise, has benefitted from a rise in vaccination rates after a slow start to the year which, if it continues, will lead to a similar rebounding of European markets. However, the recent emergence of the Delta variant in Europe could bring on a new wave of the pandemic, a shift that would weaken the euro compared to the dollar. So, traders must still contend with some uncertainty about the Eurozone in the second half of 2021.
British Pound May Continue to Lag
The British pound was weak for much of 2020 as the pandemic merged with continued uncertainties surrounding Brexit to put excess pressure on the British economy. Analysts expect the pound, which is still reeling from a severe recession, to remain weak through 2021.
Until new trade agreements with Europe in the post-Brexit era are finalized, worries over this matter will continue to hold the currency back. As the threat of the Delta variant looms, a new outbreak could put even more pressure on the already weakened pound.
Mobile Forex Trading Platforms Will Heat Up Competition
While 2020 saw a wave of new retail investor interest across most assets, the forex market experienced growth at breakneck speeds, as forex trading volume surged 300% between March and June 2020.
Since more and more retail investors have instant access to forex markets via their smartphones, finding a strategic advantage will be key to generating positive returns. A platform like HotForex (HF) with more robust research and analytic tools gives traders that competitive edge.
With advanced insights using AI to gauge sentiment and volatility based on millions of news articles, live trading positions and upcoming events, forex traders can spot opportunities across trading pairs. After creating a watchlist of their favorite trading pairs, HFapp users can use the free autochartist tool to automatically scan their watchlists and receive alerts when tradeable chart patterns emerge.
Features like these allow investors to find more opportunities and react quickly as they execute trades directly from their phones on the HFapp, wherever they are. Rapid-fire trading based on data-driven analysis like this holds the key to continuing to profit as the volatility of 2020 settles into more stable trends in 2021.
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