Hello, I'm Forex Trader Andrea Russo and today I want to talk about how recent global geopolitical tensions are radically changing the international currency balance.
In Forex, every crisis is a map of opportunities, but only those who analyze the global context can truly understand where capital will move. In this article, we analyze the main events of the week and reflect on how they could affect currencies in the coming days.
🇮🇳🇵🇰 India and Pakistan: risk of escalation across the border
After a terrorist attack in Kashmir that caused 26 civilian casualties, India launched “Operation Sindoor” targeting extremist groups across the border. Pakistan responded militarily with “Operation Bunyan-un-Marsoos”. Both countries used drones and cruise missiles.
Despite a ceasefire declared on May 10, the truce is fragile. The risk of a tactical nuclear crisis is real today.
🔍 Forex Impact: Strong pressure on the Indian rupee (USD/INR up) and increased demand for safe haven currencies such as CHF and JPY.
🇵🇸🇮🇱 Israel-Gaza: urban warfare resumes
Israeli operations in the Gaza Strip have intensified, aiming for complete control of the area. Hundreds of civilian casualties have been reported. Italy and other members of the Madrid+ Group are calling for a ceasefire, proposing an Arab plan for reconstruction.
🔍 Forex Impact: In the acute phase, gold (XAU/USD) and the US dollar are strengthening. The NIS (Israeli shekel) is showing signs of weakness, especially if the conflict extends to Lebanon or Syria.
🇺🇦🇷🇺 Ukraine-Russia: is a glimmer of hope opening up again?
Donald Trump spoke by phone with Vladimir Putin and other international leaders, including Giorgia Meloni, proposing the Vatican as a venue for new negotiations. Although the war continues mainly in Zaporizhzhia and the eastern region, diplomacy is back on the table.
🔍 Forex Impact: If the talks materialize, the EUR/USD could strengthen. If not, instability will further favor safe-haven currencies and weakness of the euro.
🇧🇫 Burkina Faso: the forgotten war
The jihadist group JNIM has carried out coordinated attacks in several cities in the north of the country, causing dozens of deaths and temporarily conquering the city of Djibo. The humanitarian crisis is worsening and the Sahel region remains among the most unstable in the world.
🔍 Forex Impact: Direct impacts marginal, but emerging African currencies continue to suffer from systemic instability and capital flight.
🇺🇸🇨🇳 US and China: new economic frictions
The second Trump administration has imposed new duties on Chinese products, exacerbating trade relations. The European Union, meanwhile, is seeking rebalancing by strengthening ties with Beijing. The global context is once again multipolar.
🔍 Impact on Forex: USD still strong in the short term, but growing tensions with China could weaken the USD/CNH and strengthen the CNY if Beijing responds with targeted monetary stimulus.
✝️ Vatican and new spiritual diplomacy
The new Pope, Leo XIV, is prioritizing migration and poverty. The Vatican proposes itself as a neutral venue for peace mediations, as in the Ukraine-Russia case. The Church returns to being a geopolitical actor.
🔍 Impact on Forex: Symbolic but relevant: the idea of Rome as a diplomatic center strengthens the perceived stability of the euro area.
📉 Italian GDP: growth slows
According to ISTAT, Italian GDP is falling in 2025. The causes? Industrial slowdown, residual inflation and uncertain global climate. However, public accounts are improving and employment remains stable.
🔍 Impact on Forex: EUR under pressure awaiting new ECB estimates. The spread remains under observation.
🧭 Final reflection: Forex and geopolitics, an inseparable pair
Geopolitical tensions are not background noise, but waves that move billions. Smart traders don't just read charts: they read the world. The fragility of international relations and ongoing conflicts will lead to a new polarization of Forex: on one side, safe haven currencies (JPY, CHF, USD in shock phases), on the other, emerging and cyclical currencies that are increasingly vulnerable.
Those who want to navigate this market must be prepared to react not to data, but to events that change data.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.