Trading Around Global Shocks: How Events Shape Forex Markets
The foreign exchange (forex) market is the largest and most liquid financial market in the world, with daily trading volumes exceeding $7.5 trillion . Unlike stock markets, which are tied to the performance of individual companies, the forex market is influenced by global events that ripple across economies and currencies. Political upheavals, central bank decisions, wars, pandemics, and natural disasters can all send shockwaves through currency markets, creating both risks and opportunities for traders. In this in-depth guide, we’ll explore how global shocks influence forex markets , how traders can interpret these events, and what strategies to use when navigating uncertain times. What Are Global Shocks in Forex Trading? Global shocks are sudden, often unexpected events that cause significant disruptions to financial markets and economic systems. Unlike gradual economic changes, shocks tend to trigger sharp price movements , extreme volatility, and shifts in market sentimen...