By James McKee
Major currencies on the Forex currency exchange (especially the USD) have been undergoing much turbulence since the crisis in the Middle East began. What started out in Tunisia spread to Egypt and is now raging in Libya in the form of a civil war. Cities held by rebels for weeks now are being threatened with all out war by the Libyan government saying they will be sending in troops to re-take the city. While Libya may only contribute 5% of the world’s oil supply they are also setting a precedent for the entire Arab world and investors are scared.
It is not just the USD that is in danger, the Euro are the currencies being affected most by the Middle Eastern crisis. The United States is of course being affected because of how dependent they are on Middle Eastern oil, but Europe is seeing quite a bit of discourse due to Italy’s large dependence on Libyan oil. Libya shows signs of having their internal conflict intensify, not calm down…the simple truth is that the Libyan government under Gaddafi is again seizing control of the country. Despite the fact that it may take a couple more weeks the Libyan conflict is on the way to being resolved one way or another.
The latest uprising has occurred in Bahrain, the financial headquarters of the Arab world has seen a good deal of turmoil recently. Bahrain is far different than Egypt or Libya because it is not an oil producing country; instead it acts as a banking hub for the countries who do conduct oil production. Major currencies on the forex market will continue to experience instability until the Middle Eastern conflict is corrected and the conflicts are resolved. Currently there are signs of Saudi Arabia experiencing unrest and if they enter a civil war the damage to the USD is incalculable.
Author is a Forex trader and financial analyst residing in Denver, Colorado. To stay up to date on all the latest developments in the financial world and beyond be sure to check out the forex exchange rates regularly