The coronavirus pandemic has impacted the global economy in a way that might be described as cataclysmic. Lockdowns around the world have depressed demand for certain products and services, and cut productivity down dramatically.

The United States bull market, which had been charging for the best part of a decade, was stopped in its tracks. Investors, confronted by an unprecedented economic shock, took action to diversify their portfolios and thereby minimise their risk.

When panic is widespread, there's an opportunity for cooler heads to earn their living. More than a third of investors, according to Schroder's Global Investor Study, elected to snap up high-risk investments, perceiving that falling share prices represented an opportunity to expand.

Forex trading markets saw a massive and sustained spike in activity, with some brokers reporting a month-on-month growth rate of 50%. This kind of explosive growth is extremely rare in the industry. But, during times as unprecedented as these, rare changes in behaviour are to be expected. Huge price swings mean large potential gains for would-be traders, and this creates a significant pull-factor.

Other factors might also have contributed to the rise in activity. With an uncertain financial future to look forward to, many might have sought to supplement their incomes by venturing into the Forex exchange. With the lockdown producing plenty of downtime for everyone, there has been plenty of opportunity for those interested in trading to get started.

The Future?

So what's next? It would be bold (and possibly unwise) to make definite predictions. The situation is highly volatile, and might be swayed one way or another by a range of factors that go beyond the financial. Political winds may start to blow; an advance in medicine might flip the entire situation on its head.

One international situation that looms large is the increasingly fractious relationship between the US and China. Edward Moya, from Oanda, thinks that political bluster is affecting investor confidence: "President Trump suggested 'decoupling' the US economy from China and reiterated massive tariffs from the US. Investors are no longer pricing calm trade waters leading up to the election as Trump is not easing up the hard rhetoric even as stock market selloff continues."

The death toll from Covid-19 is a metric that causes governments and markets considerable anxiety. The eventual arrival of a vaccine could result in a swift rally. Moya draws attention to a forecase from the University of Washington's Institute of Health Metrics and Evaluation: "The model by IHME forecasts the US could have more than 410,000 deaths by the end of the year as the winter wave of the coronavirus hits. If the country aggressively eases COVID-19 restrictions and people fail to social distance and wash hands, the death toll could be as high as 620,000 deaths."