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Shares Tank, Safe Haven CHF & JPY Gain on EgyptAir MS804 Terrorism Fears

May 19, 2016 - Written by Ben Hughes

Share Prices Dive amid Terrorism Fears, Increased Fed Rate Hike Bets



Global share markets have taken a pasting during today’s trading session. By the time equities traders got to their desks across the euroland earlier today, news was already breaking that EgyptAir flight MS804 from Paris to Cairo had disappeared off the radar.

The news, alongside last night’s heavy hints from the US Federal Reserve that it is seriously considering an interest rate hike at next month’s policy meeting, sent investors flocking out of shares and it safer havens. London’s benchmark FTSE 100 share index is trading down by a hefty 1.28% as a result and Frankfurt’s Dax index has lost a similar amount.

At the time of writing, the exact reason that flight MS804 crashed into the Mediterranean Sea during the early hours of this morning remains a mystery.

However, Egypt’s recent status as a terrorist target and ongoing concerns about the security of airside workers in Paris airports has led some analysts to suggest that the commercial airliner may have been brought down by terrorists.

Egypt’s Civil Aviation Minister Sherif Fathy concurs with this; he stated earlier today that people should not, ‘try to jump to the side that is trying to identify this as a technical failure - on the contrary. The situation may point - and I say 'may' because I don't want to speculate and I don't want to go to assumptions like others - but if you analyse the situation properly, the possibility of having a different action, or having a terror attack, is higher than the possibility of having a technical fault.’

CHF, JPY Exchange Rates Rally, CAD and NOK Dive



The safe-haven Swiss Franc (currency : CHF) and the Japanese Yen (currency : JPY) have recorded strong gains on the day thanks to the dip in investor sentiment.

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Elsewhere, the oil-driven Canadian Dollar (currency : CAD) and Norwegian Krone (currency : NOK) remain in the danger zone thanks to the latest assessment of the global oil market by leading investment bank Goldman Sachs, who issued a report warning that, ‘our outlook going forward…is that prices will likely remain trendless, with significant volatility between operational stress at $20 a barrel and financial stress at $40 a barrel.’

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