The Swine Flu has ignited fear of more economic woes, which sent the dollar high on risk aversion. How long will this last?
The news around the world is dominated by the Swine Flu – or Swine Influenza. This disease, that first made the news after cases in Mexico, now happened in the US and in other places.
Although the disease currently didn’t cause many casualties, panic is huge. There is currently no vaccination for this disease. Apart from being in the news, the Swine Flu also has economic implications:
- China and Russia ordered to stop importing pork from Mexico and certain US states.
- Asian airline shares drop on fear of drop in flights.
- Drug shares expected to rise.
- “Hog” stocks are expected to fall.
Swine Flu and Forex
This also has an impact on the forex market. Forex trading began this week with a significant strengthening of the US dollar. The “safe haven” currency is sought in times of trouble.
Again, the rsik facotr is dominant. The Swine Flu has been found in the US, and this already hurts the US economy – through the Chinese and Russian bans. Yet in these interesting times, the greenback gains from this, since the dollar is safe.
In the upcoming days, a vaccination will probably evolve for this disease, and also the over exaggerated panic will calm down. Currently, when the economic calendar is light with figures, TV screens that show the panic are dominant, and the winner is the dollar.
Later this week, there are lots of figures. Do check out the Forex Weekly Outlook.
I paid special attention to Super Wednesday which features GDP and the FOMC Statement.