GLOBAL UNCERTAINTY AFFECTS GLOBAL CURRENCIES AND GLOBAL BUSINESS

Jereaghogho Efeturi Ukusare

For investors and traders involved in global business or a business related or affected by global business, especially trade in currencies, then you must have noticed the lull in trading activities within the last seven days.

The Dollar gained significantly against the Euro, as a result of a seeming trade war; the British Pounds owing to Brexit and several other global currencies. However, this gain may be unnoticeable to non active investors and traders as these changes are in a few cents which in aggregate comes to a huge amount of money. This strengthening of the US Dollar could be attributed to the fact that the US economy has showed some strength in quietly picking up in its Gross Domestic Product and Consumer Price Index.

While that has a positive impact on the US economy, there are economies which will be adversely affected by this – a quick one will be China and many other major economies.

The uncertainty surrounding the issue of a looming trade war between America and its allies – the European Union – plays a major part in this lull in trading activities. Investors are not sure where to place their money and are holding on to it and this has had its ripple effect on many economies around the world.

Currencies around the world have perpetually been falling to the Dollar in the last one month. In addition, stock markets across major economies have also experienced downward trends. At the same time, the US Dollar has also weakened to a few currencies that are stronger like the Kuwaiti and Bahraini Dinar.

 

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