US Launches Attack on Syria: Oil and Gold Prices Increase
The US has launched 59 Tomahawk cruise missiles against Bashar al-Assad’s al-Shayrat military airfield at 8.45 (EDT) on Thursday, killing five civilians and injuring seven others. Trump’s surprise move has triggered uncertainty and shocked global financial markets, with stocks retreating and safe assets like gold and oil rallying hard. Early market spooks soon receded after it was suggested that Trump’s unpredictable move was a “one-off.”
The US dollar dropped 0.6%. The dollar has gained some of its losses after Secretary of State Rex Tillerson has calmed the markets by noting that the attack wasn’t going to be repeated. Peter Kenney, senior strategist at Global Markets Advisory Group in New York, said that "The unexpected and unequivocal nature of the U.S. response to the sarin-centric carnage in Syria by President Trump was very much in keeping with his promise not to telegraph his military options to the world in advance of taking action.”
The Euro is higher against the dollar and doesn’t seem to be affected by the US-Syrian situation.
Pound Sterling (GBP)
The pound is lower against the USD, after disappointing data from the UK. The pound fell to $1.2429 against the dollar, but has shown a small recovery, currently at $1.244.
The European markets have opened lower, with the FTSE 100 being down 5 points. France’s Cac, Germany’s Dax and Spain’s Ibex have also opened 0.4% lower.
According to Michael Hewson at CMC Markets, markets in Europe are responding to the military action against Assad’s regime in Syria and this is reflected in markets opening lower “and higher gold prices as safe haven assets attract capital flows.”
High Prices for Oil and Gold
Gold is the highest it’s been since 10 November, at $1264 an ounce.
Brent crude had increased 2% as fears of escalation in military tensions that could eventually affect supplies were growing. However, as it has been suggested that Trump’s move was a singular event, and that Congress and the American people should scrutinise any further action, Brent is only 1% higher, at $55.54 a barrel.
The yen is being favoured in times of crisis, and is benefitting since the missiles were launched at the start of the Asian trading day.