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Differences between the Foreign Exchange Market and Stock Market May 23, 2022
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Contagion

Mira Team by Mira Team
December 24, 2020
in Forex Terms
Reading Time: 1 min read
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Definition – What does Contagion mean?

A contagion is a damaging effect that has a tendency to spread. In economic terms, a contagion is an event in one country that has a disastrous impact on the economies of other countries. A contagion has a large effect on economically entwined nations, but it may also radiate out from the originating country in unexpected ways.

ForexTerms explains Contagion

Contagions can’t be explained through traditional economic ties of trade or loss of trade. The causal relationships of a contagion aren’t understood, so the extent of the spillover and the resulting damage to the world economy cannot be accurately predicted. The interconnecting of economies through the corporate structure of multinationals and the actions of various central banks has greatly increased the impact and reach of bad economic news. That said, the net benefit of world trade is greater than the risks of financial contagion.

ⓘ Mira FX is not liable for any damage or loss, including but not limited to, any loss of investment, which may be based either directly orindirectly on the use of or reliance on such information. Before deciding whether or not to take part in foreign exchange or financial markets or any other type of financial instrument, please carefully consider your investment objectives, level of experience and risk appetite.

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