#firstdealofthenewyearastylz The impact of pandemics on forex markets is a fascinating topic. When a pandemic hits, it can have a significant effect on the global economy, and consequently, on forex markets. One of the key ways pandemics influence forex markets is through increased volatility. As governments and health organizations respond to the pandemic, economic uncertainty rises, leading to fluctuations in currency values. For instance, during the COVID-19 pandemic, the US dollar did not exhibit its usual safe-haven characteristics, and instead, weakened against other currencies. This was largely due to investors seeking refuge in other currencies, such as the Japanese yen and the Canadian dollar. In fact, a study found that investing in these currencies and reducing exposure to European currencies could help minimize risk during the pandemic. Pandemics can also lead to changes in trade patterns, as countries impose restrictions on imports and exports to slow the spread of the disease. This can disrupt global supply chains, affecting the value of currencies involved in international trade. Furthermore, central banks may respond to the economic downturn caused by a pandemic by implementing expansionary monetary policies, such as lowering interest rates or engaging in quantitative easing, which can impact currency values. The performance of currency portfolios during pandemics is also worth noting. A study found that the volatility and non-parametric value-at-risk of three currency portfolios were extremely high during periods of high volatility in the FX markets, but the COVID-19 pandemic was not as risky as previous high-risk episodes, such as the Global Financial Crisis. Overall, the impact of pandemics on forex markets is complex and multifaceted. Understanding these effects can help investors and policymakers navigate the challenges posed by pandemics and make more informed decisions.