Michael Brian Young#19

번역 보기

How do wars affect forex markets?

Wars create uncertainty, risk aversion, and capital flight. Safe-haven currencies like USD, JPY, and CHF typically strengthen, while currencies of conflict zones collapse. For example, Russia’s invasion of Ukraine in 2022 triggered a surge in USD demand and weakened EUR due to energy risks. Institutions model war scenarios through stress testing, while retail traders must anticipate volatility spikes. Benefits: predictable safe-haven flows. Risks: gaps, illiquidity, and sudden reversals after peace talks. Wars show forex as a barometer of geopolitical stability—when bullets fly, money runs to safety.