The foreign exchange market, or forex market as it is commonly known, experienced a series of events that shook the global economy in recent years. These events had a significant impact on the value of currencies and ultimately affected businesses and individuals worldwide. This article aims to explore the major events that happened in the forex market, what caused them, and their implications.
One of the most significant events in the forex market was the Brexit referendum in June 2016. The United Kingdom voted to leave the European Union, which triggered a sharp decline in the value of the pound sterling. The uncertainty surrounding the UK’s future relationship with the EU caused investors to withdraw their investments, leading to a drop in the demand for the pound. As a result, the pound plummeted to a 31-year low against the US dollar.
The Brexit vote also had a significant impact on the euro. The euro experienced a drop in value as investors feared that other countries might follow the UK’s lead and leave the EU. The euro fell to its lowest level in over a decade, with the euro-dollar exchange rate reaching 1.0340, its lowest level since 2003.
Another significant event that occurred in the forex market was the US-China trade war. The trade war began in 2018 when the US imposed tariffs on Chinese imports, triggering a tit-for-tat response from China. The trade war had a significant impact on the value of the Chinese yuan, which fell to its lowest level in over a decade against the US dollar. The US dollar, on the other hand, gained ground as investors sought a safe haven currency amid the uncertainty.
The trade war had implications beyond China and the US. Other countries that were dependent on exports to China, such as Australia, South Korea, and Japan, were also affected. These countries saw a decline in demand for their exports, leading to a drop in their currencies. The Australian dollar, for instance, fell to a ten-year low against the US dollar, while the Korean won and Japanese yen also weakened.
The COVID-19 pandemic was another event that had a significant impact on the forex market. The pandemic triggered a global economic crisis, leading to a fall in demand for most currencies. The US dollar, however, gained ground as investors sought a safe haven currency amid the uncertainty.
The pandemic also led to a sharp decline in oil prices, which had implications for oil-exporting countries such as Russia and Saudi Arabia. The decline in oil prices led to a fall in demand for their currencies, with the Russian ruble and Saudi Arabian riyal weakening significantly.
In conclusion, events in the forex market have far-reaching implications for businesses and individuals worldwide. The Brexit referendum, the US-China trade war, and the COVID-19 pandemic are just a few examples of significant events that have shaken the global economy in recent years. These events have led to a decline in demand for some currencies, while others have gained ground as investors sought a safe haven currency amid the uncertainty. As the forex market remains dynamic and unpredictable, investors need to stay informed of global events to make informed decisions.
