It has been over two good decades since the forex trading industry made its way to the internet/online trading sector. From the start, the forex trading sector has dominated online trades as it has reigned over the real-time forex trading markets.
Even now, there is no other online trading instrument that can stand its ground in front of forex trading. With time, the forex trading sector has only grown larger and it continues growing to this day. Even now, the forex trading sector is growing bigger and its trading volumes have been growing larger with time.
In the past year, the average daily trading volume for the forex industry was worth $6 trillion. The number has only grown higher in the running year as it is now almost $6.6 trillion.
Most Traded Fiat Pair
In the forex trading industry, the fiat pair with the highest trades is the USD/EUR pair. While the overall trading volume for the forex sector is worth $6.6 trillion per day, it is the USD/EUR pair that translates to half of it. The pair is extremely popular because of the US dollar that is the largest global reserve country in the entire world.
The trading volume being observed by the USD/EUR means that the majority of the investors like to invest in the US dollar. They have been making huge investments in the US dollar but since the past year, the US (forex) traders are not seeing much profits.
The reason behind that is the inflation that the USD has been facing due to the occurrences that took place in the year 2020. It was in the year 2020 when the pandemic wreaked havoc all across the globe. It not only damaged the US economy but impacted the entire globe.
As most of the trades take place in the USD, therefore, it ended up taking a tremendous amount of damage. Although the pandemic is now almost over, the aftermath of the pandemic is excruciating.
Due to the delays in imports and exports, and the industries being impacted on a global scale, the inflation rate has skyrocketed.
Inflation Rate for the US Dollar
Compared to the entire world, it was the United States with the highest death toll due to the pandemic. Therefore, the United States had to take the strictest and most critical measures in order to contain the spreading of the pandemic. The country suffered elongated and the lengthiest lockdowns and curfews throughout. This is what badly impacted the United States and the country has been struggling to make a comeback from the disaster.
The data from the forex market shows that the inflation rate in the United States for the year 2021, until the end of 2021 was 6.8%. The reports reveal that since 1982, it is the highest inflation rate that the country has suffered from.
According to reports, the federal forecasts for the United States for the nine consecutive months for inflation were 2%. Unfortunately, the actual inflation in the country has remained much higher than expectations. This means that the more the inflation rate in the United States, the highest the drop in the US dollars’ price compared to other fiat currencies.
It is mainly due to the pandemic that the costs of energy, food, automobiles, medical care, and almost every basic necessity have increased in the country.
Therefore, the investors must remain very alert and vigilant when investing in forex trades, especially the USD. It may be the most demanded and traded fiat currency in the market but it may also pose many losses.
No matter what the United States of America claims, it no longer has the same value and reputation it used to have in the past. Therefore, if any online trading or forex trading platform claims it will provide huge profits for the USD pairs, it is faking it.
This is the reason it is strongly recommended that if one is interested in performing forex trades, then they must do thorough research about the trading platform. The best way of accessing one of the most reliable forex platforms is the forex broker reviews. That way, one can identify which forex trading platform to refer to.