The 2008 global financial crisis had a dramatic impact on the forex (foreign exchange) markets. Exchange rates for many major currencies, such as the Euro and the US Dollar, shifted drastically in the aftermath of the crisis as investors flocked to “safe haven” currencies such as the yen and Swiss franc to avoid risk. The volatility of the market caused exchange rate spreads between currency pairs to widen, resulting in increases in both transactional costs and foreign exchange risks for institutions and individuals who conducted business in foreign currencies.
The 2008 financial crisis was one of the most devastating downturns in world economic history. The most significant factor in this crisis was the collapse of the global Forex (foreign exchange) market. Banks and financial institutions faced a rapid decline in liquidity and credit availability, bringing a cascade of bankruptcies and defaults. The ensuing market turmoil had far-reaching implications, resulting in a cascade of global economic recession. The effects of this crisis were felt across all sectors of industry, with particular devastation being brought to the export markets, tourism and investments in the developing nations. Governments around the world had to step in and implement a series of corrective measures and reforms to avoid a complete derailment of the global economy.