Issue: Số 26 - Tháng 12 - 2024Tài chính - Ngân hàng - Bảo hiểm
The impact of geopolitical risk on exchange rate volatility in 10 countries
Published: July 29, 2026
Abstract
This study examines the impact of geopolitical risk on exchange rate volatility in 10 countries
(10 currency pairs) from January 2008 to October 2023, using monthly data. Through quantile
regression, the study evaluates how interest rate differentials and geopolitical risk affect exchange
rates across different quantiles. The findings reveal that interest rate differentials have a negative
impact at lower quantiles but become positive at middle and high quantiles, highlighting the US
dollar’s role as a safe haven currency. The study underscores the significant influence of factors
such as geopolitical risk and economic policy on the foreign exchange market, providing valuable
insights for financial managers and policymakers to navigate global financial volatility.
Keywords
geopolitical risksexchange ratesresponding to global financial volatility
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