The different effects of various geopolitical conflicts on currency exchange rates

1. Short-term regional conflicts that are not directly related to the political, economic and strategic interests of the United States or conducive to its strategic intentions are conducive to the strengthening of the safe-haven currency function of the US dollar. For example, the recent military conflict between Lebanon and Israel has come to an end. Although the Middle East has US interests, the conflict does not pose a strategic blow and economic damage to the United States, and even benefits the economic interests of some economic groups in the United States. Therefore, the investment market ultimately chose the US dollar as a safe-haven currency, so the US dollar and gold were favored as safe-haven currencies and assets, especially gold, whose prices rose sharply.

2. Geopolitical conflicts that are closely related to the political, economic and strategic interests of the United States and directly affect the strategic interests of the United States, such as the issue of Iran verification. It can be understood as follows: containing and eliminating the current Iranian regime is an integral part of the US military and economic strategy in the Middle East and even the world. Therefore, the emergence of the Iran verification crisis some time ago now largely supports the rise of non-US currencies; after August 22, the issue of Iran verification has emerged again, but if the degree is not strengthened, I personally believe that non-US currencies will not only not rise, but will also take profits. But the world is not peaceful, and the exchange rate will eventually break the deadlock.

3. The impact of conflicts in Northeast Asia on exchange rates and precious metals. If North Korea tests missiles, the Japanese authorities consider it an immediate danger, and the yen falls in response; at the same time, I believe that if the dispute between Russia, Japan, South Korea and Japan over territorial waters and islands escalates, then the yen will also fall.

4. Regional terrorism occurs. In any country or region, the currency exchange rate of that country or region will fall sharply, such as the attempted plane bombing in the UK a few days ago, which dealt a direct blow to the pound; the most severe is the September 11 incident in the United States, which caused a huge shock wave to the global investment market, including currency exchange rates and gold prices.

5. The degree of impact on international currency exchange rates: If geopolitical conflicts are sudden or obviously escalating, the degree of trend impact will increase, otherwise it will decrease.

6. For a country or region, when a geopolitical conflict occurs, the exchange rate will support the upward development of the national currency that benefits one party to the conflict.

7. For a country or region, when geopolitical conflicts intensify, the short-term impact on currency exchange rates and precious metals comes first, followed by economic data and other factors.

The above is my personal summary opinion, which is for investors' reference only.