Businesses should beware that politicians have the power to shape their fortunes for good and for bad.
A new research project from forex experts Daily FX shows how the currency markets react after key world leaders say and do something headline-grabbing.
Whether businesses are engaged in imports and exports and have a direct interest in the rise and fall of their currency or just want to keep on top of the cost of doing their work, the price of the Pound is s key indicator.
The Daily FX project covers 59 events between April 2017 and April 2018, looking at news events for Donald Trump, Theresa May, Jean-Claude Juncker, Justin Trudeau, Shinzo Abe and Malcolm Turnbull.
● The Dollar was down against five major currencies after the President kick started a ‘trade war’ with sanctions on China.
● The Pound fell against five key currencies in the face of June 9’s uncertain UK General Election result.
● The Canadian Dollar rose despite high profile criticism of Justin Trudeau’s trip to India.
● The Japanese Yen increased in value after Shinzo Abe won a snap election to cement his position as Prime Minister.
It pays for businesses to be able to spot which big news stories will affect the markets – and how. Donald Trump’s escalating war of words with North Korean leader Kim Jong-un, for example, was often followed by an upturn for the Dollar. Theresa May’s deal to agree a ‘divorce bill’ after through-the-night-talks with the EU did little to move the forex markets.
We live in tumultuous political times – and we’re never far from another big news story – which means that businesses need to be on guard and brace themselves for a few economic twists and turns.
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