What to expect from forex markets amid a global pandemic and political shifts

By Jin Dao Tai


WITH a surge in COVID-19 cases in Malaysia and the implementation of movement control order (MCO) 2.0, economists have slashed Malaysia’s 2021 growth forecasts. Although Malaysians are very resilient and will without a doubt come out of this stronger, the immediate negative impact of an economic shutdown is undeniable.

Having experienced 2020’s devastating impact towards their livelihood, Malaysians realize that despite Government support and stimulus during an MCO, having additional sources of income will become a necessity rather than a luxury.  The new normal is to maintain a job while seeking other sources of income, such as passive investments, contract work, and attempting home-based employment.

Why forex trading?

Forex (foreign exchange) trading is an attractive and popular option compared to other financial instruments. It is easily accessible, simple to learn and all you need is a small capital to get started.

Besides that, the forex market is open 24 hours every weekday, which means anyone can trade at any time based on their convenience, be it after coming home from their primary job or during their lunch breaks, making it a perfect secondary source of income.

With that being said, every investment still has its risks. I believe that it is important to have the necessary education and knowledge to ensure that each trader is well-equipped and able to brave all kinds of market conditions.

Hence, for new forex traders, my advice is to trade with caution at the start, familiarize yourself with the market before attempting larger trading opportunities and be focused on the mindset of accumulating wins rather than expect a windfall.

2021 forex expectations

This year, economies are certainly going to be better prepared when compared to 2020. Naturally, as individuals seek additional sources of income, trading will come to be at the forefront of financial empowerment as the forex market is an integral part of today’s economic system.

The COVID-19 pandemic has brought in a huge influx of new traders and trading volumes in 2020. We foresee that this is likely to continue throughout 2021. Malaysians who are keen to have additional sources of income are now likely to be even more open to forex trading and investing. However, a word of advice to all new traders or investors – spend more time understanding the risks involved, and not be blinded solely by the returns.

Besides that, while we do see many economies getting back on their feet and returning to pre-COVID-19 performance, we cannot discount the fact that some economies are still heavily affected by the pandemic.

Through intermarket analysis, we can see that the discrepancy between said markets is likely to create clear investment opportunities for traders. It will be easier to invest in the stronger currency and selling against the weaker. Hence, we are likely to see more trending price movements in 2021, with a clear distinction between economic performance.

That said, it is also important to keep track of current market trends such as political movements and technological advancements so that traders can make the best decisions when trading.

How current issues in the US could affect the forex market?

Incidents such as the storming of the US Capitol by Trump supporters in an attempt to overturn his defeat due to claims of widespread voter fraud has certainly been a major talking point for a few weeks. However, incidents like these are considered minor blips to the US economy.

While the introduction of further taxes and massive stimulus packages by President Joe Biden following his inauguration on January 21, 2021 could result in a short to medium-term weakening of the US dollar, we are likely to see some recovery to the US dollar in the long run due to it having a reserve currency status and being a global currency.

That said, continual US weakness is likely to have an impact on emerging markets, making US debt relatively cheaper. However, this would eventually influence global trade and would, in turn, require trading partners to weaken their currency to match the weakening of the US dollar.

With the possibility of a recovery in the global economy in 2021, experienced forex trading firms like ForexBriefcase are no doubt ready and poised to take full advantage of the forex market’s high liquidity and will consistently aim to deliver superior performance across all market cycles, assisting clients to achieve their passive income goals.

All in all, it is important that we stay strong and keep our heads high in these trying times. Staying vigilant is one of the things that we could do now whilst being cooped up in our houses. To break the mundanity, why not pick-up forex trading today to earn some passive income as a form of financial insurance during the pandemic? – Feb 12, 2021


Jin Dao Tai the founder of ForexBriefcase, a leading global multi-account manager, providing its clients with capital protection and competitive return-on-investment with an unequalled industry expertise and knowledge.

The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.

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