Paul Isaiah T5_ Wilson

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How do economic sanctions impact forex markets?

Sanctions cut countries from global finance, collapsing their currencies. For example, sanctions on Russia froze USD reserves and crashed the ruble before capital controls stabilized it. Institutions navigate sanctions by adjusting portfolios, while retail traders witness extreme volatility. Benefits: opportunities for short-term trades. Risks: unpredictable interventions like capital controls or pegging. Sanctions remind traders that politics can trump fundamentals—currencies are not only economics but tools of power and punishment.