Commodity based currencies and perceived riskier assets have suffered a decline in demand following Israel’s assassination of the leader of Hamas’s military. Risk appetite has waned, with weak economic data on both sides of the Atlantic and rising tensions in the Middle East weighing on sentiment.
The airstrike and the clear escalation of the conflict have caused traders to seek shelter in the safe haven currencies of the US Dollar and Japanese Yen. In retaliation of the air strike, Hamas launched a salvo of rockets into the south of Israel, killing three people and prompting the Israelis to retaliate with more strikes. The nation’s air defenses reported shooting down more than 30 missiles targeted at its territory.
Israel on Wednesday assassinated Hamas’s military mastermind and shelled the enclave from the land, sea and air, killing 13 people, including five militants, three children and a pregnant woman. More than 100 were wounded.
More days of fighting are expected after Israel warned that it was calling up reservists and threatened that a land offensive could be launched in a bid to remove Hamas’s ability to launch rockets at its territory. The fighting comes after weeks of cross border clashes and defied hopes that Egypt’s peace plan was working.
Israel’s Operation Cast Lead in 2008-2009 began with a week of air attacks and shelling, followed by a land invasion of the blockaded coastal strip, which was sealed off at sea by the Israeli navy. Some 1,400 Palestinians were killed and 13 Israelis died in that conflict.
Such a repeat of that war will heighten tensions that are already close to boiling point across the Middle-East. The Syrian civil war, the aftermath of the Arab Spring and the growing military build up of Western forces in the Gulf to challenge Iran has caused the markets to become very nervous about next year. If it does come down to a war then the Palestinians estimated 35,000 fighters will be no match for Israel’s tanks, gunships and F-16 fighter bombers. They can also mobilise up to 175,000 infantry.
The Pound to Euro exchange rate is currently trading at 1.240
The Pound to US Dollar exchange rate is currently trading at 1.584
The Pound to Australian Dollar exchange rate is currently trading at 1.530
The Pound to New Zealand Dollar exchange rate is currently trading at 1.950
The Pound to Canadian Dollar exchange rate is currently trading at 1.586
The Pound to Emirati Dirham exchange rate is currently trading at 5.819
The Pound to Swiss Franc is currently trading at 1.494
The Pound to Japanese Yen exchange rate is currently trading at 128.2000
The Euro to US Dollar exchange rate is currently trading at 1.276
The Euro to Pound exchange rate is currently trading at 0.805
The Euro to Australian Dollar exchange rate is currently trading at 1.232
The Euro to New Zealand Dollar exchange rate is currently trading at 1.571
The Euro to Canadian Dollar exchange rate is currently trading at 1.277
The US Dollar to Pound exchange rate is currently trading at 0.631
The US Dollar to Euro exchange rate is currently trading at 0.785
The US Dollar to Canadian Dollar exchange rate is currently trading at 1.002
The US Dollar to Australian Dollar exchange rate is currently trading at 0.965
The US Dollar to New Zealand Dollar exchange rate is currently trading at 1.232
The US Dollar to Japanese Yen exchange rate is currently trading at 80.830
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