Series: Geopolitics for Traders
Explainers connecting the big geopolitical concepts to their concrete effect on the currency market: why does the dollar rise in a crisis? How does oil move the Canadian dollar? What is the geopolitical risk premium? The headline is the door; the mechanism is what you learn.
Tariffs and currencies: why does a trade war move the forex market?
A country announces tariffs and the other side's currency drops the next day. Why does a tax on imports move the forex market? The mechanism is more double-edged than it looks.
Sanctions and currencies: how can a political decision sink a currency?
In 2022 a currency lost close to a third of its value in days — not because of its economy, but because of a political decision. Here is how sanctions hit a currency, and why the effect is not always what it looks like.
The geopolitical risk premium: why does fear have a price in the market?
Two near-identical assets, one in a calm region and one in a tense one, trade at different prices. That gap is the geopolitical risk premium — and it moves currencies before anything happens.
Petrocurrencies: why does the Canadian dollar rise and fall with oil?
Crude ticks up and the Canadian dollar tends to follow, almost like a reflex. It is not a coincidence — it is what makes a currency a petrocurrency. Here is the mechanism.
The Strait of Hormuz: how can one stretch of water move the entire forex market?
Around a fifth of the world's oil squeezes through one narrow strait. Threaten it, and crude spikes and currencies lurch. Here is how a choke point ripples into forex.
Safe havens: why does the dollar rise when fear hits the market?
A war headline hits and the dollar jumps while your AUD/USD sinks. That reflex has a name — the flight to safe havens. Here is the mechanism, not just the news.
