Forex trading on PrimeXBT and other portals is becoming more and more popular, so much so that in April 2022, the turnover of trading reached $2.98 billion. What do these numbers mean? In April 2021, the turnover was $2.58 billion, which is a 20% increase over the past year. Forex trading is growing, although the numbers here seem a bit outdated, they have consistently shown an upward trend over the years.
Currencies go up and down every minute, but not significantly like other markets. Small trends are the main pillars that drive the market, as well as political and economic factors in the respective countries. The EUR/USD remains the most traded currency in London and virtually all Forex markets, according to PrimeXBT data. However, GBP/USD, USD/JPY and AUD/USD also account for a significant portion of trading in the various markets. Understanding currency movements helps explain why many traders are curious about Forex trading and why we refer to it all the time.

What are the main factors influencing the current Forex market?

COVID-19 is right at the top of the list of factors to watch in all markets. However, a sharp rise in commodities in the third quarter, which extends to the last financial period, has become a giant. It is worth noting that, to the extent that COVID is high, inflation is an important aspect that influences central bank decisions. An increase in interest rates
 will lead to an upward trend towards a particular currency, and the opposite is true when central banks cut interest rates. Many Forex markets on PrimeXBT are on edge, any sign that interest rates are going to fall will ignite the markets.

COVID-19 is driving the current inflation; it follows a long period of reduced activity during the lock-in period to slow the spread. Once economies opened up, manufacturers could barely keep up with consumer demand, making existing goods on the market more expensive. The major markets of North America, the Eurozone and the UK all saw sharp increases in consumer goods as a result of the bottlenecks caused by the supply chain problems that rocked the world.
The U.K. saw inflation rise to 4.2 percent, a level not seen in a decade, while the eurozone saw inflation rise to 4.9 percent.
While the chaos has rocked many markets due to shortages, central banks have refused to act, believing that once supply catches up, inflation will return to pre-pandemic levels.

Foreign exchange market outlook in 2023

The U.S. is expecting an interest rate hike, which will occur in the second half of 2023. Such speculation will surely encourage a bull market in the weeks leading up to the expected interest rate increase. The situation surrounding COVID-19 will help gauge future supply and demand curves. However, one soothing aspect is that markets will surely calm down as manufacturers work to fill shortages as the holiday season approaches.
European markets will see little to no change in interest rates in 2023. European banks, including the European Central Bank, are looking for market forces to help reduce the inflation rate. The eurozone is in a particularly difficult economic situation compared to the U.S. or U.K. market, and has one of the highest unemployment rates of any major market, a situation that makes it cautious.
The divergent actions of the various central banks will likely encourage moves toward certain currencies. The actions of the Bank of Japan also make the yen a risky venture; the dovish bank has not done much to take the pressure off it during the year.
Omicron, the new COVID-19 strain, is also an added factor; it shows the volatility of the foreign exchange market - a slight change in political or economic directions can make any currency a risky trade. The new strain could upset current economic gains after a successful vaccination campaign in many markets, further frustrating Forex turnover in April 2023.

Conclusion

The Forex market, as shown by PrimeXBT's data feeds, is large, and future projections show that it will continue to grow.
COVID-19 slowed some markets, but April 2022 showed strong resistance to negative growth - a positive for 2023. Central bank actions to warn of the prevailing inflation rate will frustrate the Forex market in 2023. However, past projections that show steady growth should increase investor confidence.