Comparative Analysis of Foreign Exchange Market Shock Transmission and Recovery Resilience Among Major Economies Under Geopolitical Conflicts: Evidence from the Russia-Ukraine Crisis

Abstract

This research presents a comprehensive empirical analysis of foreign exchange market dynamics during the Russia-Ukraine crisis, examining shock transmission mechanisms and recovery resilience across major global economies. Using high-frequency data spanning six months before and after the conflict onset, we develop an innovative dual-metric framework combining volatility clustering analysis with novel recovery trajectory modeling. Our methodology quantifies both immediate shock absorption capabilities and long-term resilience characteristics across G7 currencies and emerging market representatives. The study reveals significant heterogeneity in crisis response patterns, with unexpected resilience demonstrated by certain currencies traditionally considered vulnerable. Through advanced econometric techniques including time-series decomposition and cross-correlation analysis, we identify key macroeconomic factors that determine differential recovery performance. Our findings challenge conventional safe-haven currency assumptions and provide actionable insights for central bank crisis protocols. The research contributes to financial contagion theory by establishing quantitative benchmarks for economic resilience measurement during geopolitical upheavals. Policy implications suggest targeted interventions for enhancing national economic security through improved foreign exchange market stability mechanisms.