So, like, you know how sometimes things go totally crazy in the market and everyone starts freaking out? Well, it turns out that those moments are when we get to see if everything is actually stable underneath all the chaos. In the foreign exchange market, which is worth a whopping $7.5 trillion, the key to stability is liquidity.
Last month, we got a real test of how stable things are when President Donald Trump made some tariff announcements on April 2. The intraday volatility that followed led to a huge increase in trading volumes, wider bid-offer spreads, and seriously tough liquidity conditions. It was like a rollercoaster ride, but with money involved.
But, like, what does all of this mean for the vulnerabilities in the market? Honestly, I’m not really sure why this matters, but it seems like a big deal. Maybe it’s just me, but I feel like we should probably pay attention to this stuff. It’s like peeling back the layers of the market and seeing what’s really going on underneath all the fancy trading.
