Good day forex traders.
Last week bought us significant events. I would like to discuss about the US Syrian strike. Risk aversion is an important force among economic markets and it is best to understand it.
BBC reports ”
The price of oil has hit its highest level for a month in response to the US military’s missile attack on a Syrian government airbase.
Brent crude surged above $56 a barrel, but later fell back to just over $55.
Syria has limited oil production, but its location in the Middle East and alliances with big oil producers raised worries about a spreading conflict that could disrupt crude shipments.
European markets opened lower, but London’s FTSE 100 gained ground later.
It ended the day 0.6% higher at 7,349 points. The Cac in Paris also closed higher, up 0.3%, but Frankfurt’s Dax was 5 points lower.
Other asset classes seen as havens in times of trouble made gains. Gold prices were up 1.1% at $1,266.45 an ounce on Friday afternoon.
As mentioned previously, markets are affected when political / sovereignty complications arise. Oil and gold being important commodities will exert influence on markets during times of risk aversion.
It is important that we continue to monitor the developments in the Middle East. An escalation of conflict will likely increase risk aversion.
If you want to read more about risk aversion, head over to our forex education section.