As the COVID-19 seems to shift in the rearview mirror, the attention of the world is diverted towards the economy and its recovery. Forex is the largest financial market in the world, accounting for transactions worth trillions of USD every day, and also a place where many retail traders are involved, for the purpose of taking advantage of currency fluctuations.
For years, FX volatility has been subdued by the monetary easing, and no major disruptive events have changed that reality – until the pandemic came along and made this market much more attractive for trading.
US Dollar Rising
The first reason why FX is an optimal place to trade currently has to do with developments concerning the US Dollar. The global reserve currency has been rising for most of 2021, and that in turn elevated volatility in some of the popular pairs like EURUSD, GBPUSD, and AUDUSD. These currency pairs lead in terms of daily volumes and that is why some retail traders are able to spot intra-day trading opportunities.
A rising USD can have numerous implications for the global economy down the road, which in turn could lead to waves of volatility, as markets need to price in inflationary/deflationary factors, government interventions, and interest rates developments.
Central Banks Changing Monetary Stance
Monetary accommodations reached new uncharted terrain over the past year, as global central banks flushed markets with liquidity in order to suppress volatility and create trust in the private sector.
Counteracting the damaging effects of the pandemic required substantial liquidity injections, but now that economies have reopened, supply-side disruptions are putting pressure on central banks to shift their monetary stance. Higher interest rates could in turn lead to significant price action moves in the FX market.
Retail Brokerages Offering Competitive Conditions
Compared to several years ago, retail CFD traders can take advantage of the competitive offers made available by leading brokerages. With brands such as TRADE.com providing tight spreads, user-friendly software, and educational resources, getting involved in the FX market is now accessible to any individual with the motivation to learn.
A proper trading infrastructure requires a mix of expertise, advanced technologies, and a customer-centric approach. TRADE.com has years of experience in this field and that creates a major competitive advantage. There are over 100,000 customers currently using the services provided by this brand.
CFD trading on FX pairs comes with attractive costs, low deposit requirements, and tools such as Trading Central that can offer valuable insights into how prices can evolve in the near term.
TRADE.com used its experience to design a brand-new trading platform, which is now benefiting from good feedback. WebTrader can be used to track markets and new trade setups on any device since it integrates advanced tools, risk management, price alerts, and account management features.
The broad sentiment of uncertainty is expected to keep FX volatility elevated in the weeks and months ahead, which translates into potential trading opportunities for traders prepared with the right tools and trading strategies.