Luke Benjamin T_ Young#90

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How do military alliances influence forex risk premiums?

Military alliances like NATO provide security guarantees that stabilize member currencies. Without such protection, smaller nations would face higher risk premiums, weakening their currencies. For example, Eastern European currencies gained credibility after NATO integration. Institutions price geopolitical risk into forex valuations. Retail traders often overlook security factors, but they directly affect long-term stability. Military alliances show forex as geopolitical insurance—peace and security reduce risk costs in currency values.