A fund manager, Mr Stano Emmanuel stated that the COVID-19 pandemic has attracted many players to forex trading.
Emmanuel, the CEO of DCROCSTYLE Nigeria Ltd made this known in an interview with the News Agency of Nigeria (NAN) on Sunday in Ilorin.
According to him, COVID-19 has expanded the base of players in the market while many economies were suffering.
” Presently, we now have more players in the forex market than before. This is because so many businesses have really gone down.
“Everybody wants to go online, especially when there was a global lockdown.
“So many people want to get trained online to be able to access the financial markets. There are so many more players now than before,” he said.
Emmanuel, however, said the pandemic and the global lockdown did not seriously affect the forex market.
“Covid-19 doesn’t really have much effect on the forex market like other physical businesses. This is because you have to trade in a stronger currency against the weaker ones,
“So I will decide to go with the US dollars, instead of trading in the naira.
“At the end of the day, you will still make money because we are trading in a stronger currency even with crisis and a pandemic; you trade a stronger currency against a weaker one.
“The only way it affected us as a company, not the forex market, is that we managed positions.
“Though this could be COVID 19 era, the market is extremely volatile and you can see a sharp drop and a sharp increase in prices at some point.
“This is because there are news items that come in day in, day out. This news is more than what should come in on a normal day.
“So at the end of the day, there is some certain economic news that comes up that could strengthen the dollar within the twinkle of an eye and could also drop the dollar within the same time span.
“We, at our company, have been managing a trading position for the past six months now.
“This position did not allow us to place withdrawal or even pay customers.
“Why? Because if we tamper with our trading transaction at that time, we would have what we call a margin call and it will affect our trade,” he said.
The forex expert, however, said that because of the trade war between the U.S. and China, most forex traders had shifted to trading in gold, metals and silver.
“We trade a stronger currency against the weaker currency in our business.
“Because of the uncertainties coming from the US-China trade war, traders now take gold as insurance.
“This explains why gold surged to an all-time high recently.
“Gold prices wobbled last week, though, dropping 5.72 percent in what was the worst performance over the course of 24 hours since 2013.
“At one point, the USD wiped out all the progress it made over the last three weeks in a span of two days. It was the worst week for gold in five months,” he added.