Can We Sustain High Trading Volumes During The Pandemic?

Permanent shifts

According to new research from leading financial services analysts, the global pandemic may have permanently altered the forex market’s inherent structure. The view is that, although pricing and volumes may return to normal, the way in which trading volumes are channeled, which was significantly altered during the coronavirus, and will likely continue into the future.

For example, the pandemic prompted an increase in volumes through single-dealer platforms and voice trading, as more traders emphasized the importance of relationships with dealers in the forex market as perceived liquidity declined.

Forex traders are also now breaking up larger trades and delaying trade execution, behavioral shifts that will very likely play out analysts say, even after the global crisis has passed.

Conclusion

The circumstances leading to 2020’s surge in forex trading volume have been unprecedented. As we enter the pandemic's second year and with the vaccines being rolled out, the global economy is looking like it will return to a semblance of normality soon.

Sustaining those trading volumes seen last year is unlikely. However many of the adjustments the industry made in order to manage the surge in demand will likely stay on well into the future.

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