Lucas T444_ Moore#30

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How do geopolitical conflicts affect forex?

Conflicts such as wars, sanctions, or trade disputes generate volatility. For example, Russia–Ukraine tensions caused RUB collapse and EUR weakness due to energy risks. Institutions hedge geopolitical exposure with options, while retail traders face gaps and spreads. Benefits: clear directional moves offer opportunities. Risks: unpredictability and extreme slippage. Geopolitics turns forex into a reflection of global power struggles. Traders must monitor not only economics but also diplomacy and conflict, as headlines can move currencies faster than data.