Unfortunately I have had to write multiple posts over the years following attacks across the world and the effects this has on currency exchange rates, and this is now being treated at the time of writing this article, as a terrorist incident by the Metropolitan Police. The news has saddened and shocked us all, and there will always be knock-on effect in the currency markets which it is our duty to cover.
If you have not yet heard the news, there was an attack in Westminster, London, today and a live update feed can be found here.
The Pound had been enjoying a further rally against the Australian Dollar to begin the day, with a solid performance by Theresa May in Prime Ministers Questions in batting away arguments for a second Scottish Referendum. Markets were becoming confident in the setting to which Article 50 would be triggered next week.
However, the day took a devastating turn this afternoon, with the shock of a terror incident hitting currency markets fast. The traditional weakening of the currency attached to the victim country occurred across the board for the Pound, not just against the Australian Dollar, but we have since seen some recovery now that it seems not to be an ongoing attack.
As with previous attacks, Brussels and Germany to name but a few, currency markets appear to return to some degree of normality by the next day. Whilst the UK and the world will be digesting this for the days to come.
The next key development will actually be the interest rate decision in New Zealand overnight, which will show overall confidence in the region. This is expected to be fairly dovish given the recent hit to commodity prices which Australia and New Zealand depend on, as it seems likes some of the losses recorded for the Pound against the Dollar today can be recovered.
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