http://www.theforexnittygritty.com/forex/forex-response-to-al-qaeda-attacks
Forex Response to Al-Qaeda Attacks
The news is full of stories about the Taliban breaking into prisons to release imprisoned members and kill enemies. The USA and Great Britain have just closed embassies in East Africa and the Middle East and sent staff home from Yemen. Where is all of this going? What is the Forex response to Al-Qaeda attacks in this region? Experts consider Al-Qaeda operations in the Arabian Peninsula to be the most dangerous and worrisome. Estimates are that there are hundreds of fighters and thousands of devoted followers of this group in tribal areas of Yemen. They have been responsible for numerous attempts to injure and kill Westerners as well as their enemies in the Middle East and East Africa. The question that Forex traders need to ask is to what degree actions of Al-Qaeda will affect foreign currency rates. Al-Qaeda is not a sovereign nation and does not have a currency. However, it is a loosely connected assortment of groups strung out across much of South and West Asia and East Africa. This area is rich in oil and possesses one of the choke points for oil shipping, the Suez Canal.
Forex Response to Al-Qaeda Attacks
A practical approach to trading currencies is to trade volatile pairs. To the degree that Al-Qaida’s activities affect oil shipments they may affect the Euro or the Yen directly as both Europe and Japan receive oil directly from the Middle East. Although the USA has reduced its energy dependence on the Middle East the US economy is still trying to recover from the recession and could be hurt by a shortage of oil and resulting higher prices. All major currencies could be affected in a Forex response to Al-Qaeda attacks. However the point of trading in a volatile market is to find currencies that will trade in opposite directions as a result of a given event. Among the major currencies our opinion is that the Yen and Euro would be most damaged while the Canadian and US dollars would be minimally affected. However, this argument only has to do with oil supplies. To the extent that attacks affect business sentiment across the board the Forex response to Al-Qaeda attacks could be more broadly felt. Then the question might be just which currency might be safe from a negative Forex response to Al-Qaeda attacks.
2. The news is full of stories about
the Taliban breaking into prisons
to release imprisoned members
and kill enemies. The USA and
Great Britain have just closed
embassies in East Africa and the
Middle East and sent staff home
from Yemen.
By: http://www.theforexnittygritty.com/forex/forex-response-to-al-qaeda-
attacks
3. Where is all of this going? What is
the Forex response to Al-Qaeda
attacks in this region? Experts
consider Al-Qaeda operations in
the Arabian Peninsula to be the
most dangerous and worrisome.
By: http://www.theforexnittygritty.com/forex/forex-response-to-al-qaeda-
attacks
4. Estimates are that there are
hundreds of fighters and
thousands of devoted followers of
this group in tribal areas of Yemen.
They have been responsible for
numerous attempts to injure and
kill Westerners as well as their
enemies in the Middle East and
East Africa.
By: http://www.theforexnittygritty.com/forex/forex-response-to-al-qaeda-
attacks
5. The question that Forex traders
need to ask is to what degree
actions of Al-Qaeda will affect
foreign currency rates. Al-Qaeda is
not a sovereign nation and does
not have a currency.
By: http://www.theforexnittygritty.com/forex/forex-response-to-al-qaeda-
attacks
6. However, it is a loosely connected
assortment of groups strung out
across much of South and West
Asia and East Africa. This area is
rich in oil and possesses one of the
choke points for oil shipping, the
Suez Canal.
By: http://www.theforexnittygritty.com/forex/forex-response-to-al-qaeda-
attacks
7. Forex Response to Al-Qaeda
Attacks
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attacks
8. A practical approach to trading
currencies is to trade volatile pairs.
To the degree that Al-Qaida’s
activities affect oil shipments they
may affect the Euro or the Yen
directly as both Europe and Japan
receive oil directly from the
Middle East.
By: http://www.theforexnittygritty.com/forex/forex-response-to-al-qaeda-
attacks
9. Although the USA has reduced its
energy dependence on the Middle
East the US economy is still trying
to recover from the recession and
could be hurt by a shortage of oil
and resulting higher prices.
By: http://www.theforexnittygritty.com/forex/forex-response-to-al-qaeda-
attacks
10. All major currencies could be
affected in a Forex response to Al-
Qaeda attacks. However the point
of trading in a volatile market is to
find currencies that will trade in
opposite directions as a result of a
given event.
By: http://www.theforexnittygritty.com/forex/forex-response-to-al-qaeda-
attacks
11. Among the major currencies our
opinion is that the Yen and Euro
would be most damaged while the
Canadian and US dollars would be
minimally affected.
By: http://www.theforexnittygritty.com/forex/forex-response-to-al-qaeda-
attacks
12. However, this argument only has
to do with oil supplies. To the
extent that attacks affect business
sentiment across the board the
Forex response to Al-Qaeda
attacks could be more broadly felt.
By: http://www.theforexnittygritty.com/forex/forex-response-to-al-qaeda-
attacks
13. Then the question might be just
which currency might be safe from
a negative Forex response to Al-
Qaeda attacks.
By: http://www.theforexnittygritty.com/forex/forex-response-to-al-qaeda-
attacks
14. How Far Away Is Far Enough?
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attacks
15. The more self-sufficient a nation is
the less its currency is likely to be
adversely affected by events such
as Al-Qaeda terrorist attacks.
Brazil comes to mind as do
Colombia and Mexico.
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attacks
16. Panama is far from the Middle East
and would likely prosper if
shipping were to be re-routed
through the Panama Canal instead
of the Suez Canal but the
Panamanian Balboa is tagged one
to one to the US dollar.
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attacks
17. On the other hand Colombia is
coming out of a decades-long civil
war and seeing a brighter future
with less terrorism instead of
more.
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attacks
18. Brazil and Mexico are vying for the
title of the new Latin American
superpower and are increasingly
involved with trading within Latin
America which protects them from
the shock of events elsewhere.
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attacks
19. As always a focused approach to
Forex trading wins in the end. If
you wish to profit for any
anticipated Forex response to Al-
Qaeda attacks you need to pick a
currency pair and calculate the
likely effects on each member.
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attacks
