Isaiah Thomas_ Sanchez#90

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How do equity market crashes impact forex liquidity?

Equity crashes trigger margin calls and deleveraging, draining forex liquidity. In 2008 and March 2020, USD spiked as investors sold everything for cash. Institutions manage cross-asset liquidity stress by reallocating to cash. Retail traders often face widened spreads and slippage. Benefits: clear safe-haven flows. Risks: disorderly moves and broker stress. Equity crises reveal that forex is not isolated—when stocks collapse, forex becomes the first stop for global liquidity demands.