Edward274 Moore#27

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How do political elections influence forex markets?

Elections inject uncertainty, often weakening local currencies as investors await clarity. For example, GBP fell ahead of the Brexit referendum. Outcomes that favor stability or market-friendly policies strengthen currencies, while populist or uncertain results weaken them. Institutions hedge exposure with options around election dates. Retail traders should avoid overleveraging during election periods, as volatility is extreme. Benefits: elections offer trading opportunities via sharp moves. Risks: outcomes can defy polls, leading to sudden reversals. Elections remind traders that forex is not only economics but also politics—the fate of currencies often hinges on voter decisions.