FX Markets in the Age of COVID-19

By David Brown, Chief Operating Officer, IPC

FX, as an asset class, has long exhibited certain key and defining features in the context of the global financial markets. Firstly, there is the intrinsic link between FX and the real economy – and the role that FX plays not only in facilitating global trade and commerce, but also payments. FX markets are primarily driven by macroeconomic events, and relative exchange rates are a direct reflection of a country’s economic health. Secondly, FX is typically the most immediately reactive asset class when it comes to economically significant events – whether these be, for example, the announcement of a change in Bank of England base rates, through to new data on the impact of Brexit and COVID-19.

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