Earthquake impact on financial markets. how to deal with it? | Forex Factory

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Earthquake impact on financial markets. how to deal with it?

  • #1
  • First Post: Feb 24, 2011 4:17am Feb 24, 2011 4:17am
i know this is impossible to predict.

but i just wonder when a major earthquake hits a country like it did in new zealand. how long does this usually take to recover?

1 week, 3 weeks, 1 year?

i never had to deal with earthquakes before trading forex. but this news gave a hit on my open trades.

so i am thinking should i close my trades, or should i keep them open and let them recover?

just wondering is anybody else was in this situation before and how he or she dealt with it.

thanks in advance
  • #2
  • Feb 24, 2011 11:35am Feb 24, 2011 11:35am
Earthquakes will have direct impact on stock markets because less population means less sales and less profits for companies. Forex will not be affected immedaitely because forex is competition between international currencies.
  • #3
  • Feb 24, 2011 12:20pm Feb 24, 2011 12:20pm
IMHO...... earthquake very little impact.....new zealand not much of an impact at all......earthquake in china or japan maybe. But currently the oil and gold markets are in panic mode i think oil mainly is driving commodities and currency at the moment
  • #4
  • Edited 3:58pm Feb 24, 2011 3:47pm | Edited 3:58pm
Quoting information
Earthquakes will have direct impact on stock markets because less population means less sales and less profits for companies. Forex will not be affected immedaitely because forex is competition between international currencies.
That is not entirely true. While it might not have larger effects in the long run, you need to take into consideration amount of fear and panic that pours into the market in short amount of time. Would you want to hold nzd dollar knowing that there is even a slight chance of lowering interest rates just to pump some money into the damaged infrastructure. As the interest rates were raising in NZ before , there must have been some optimistic investors holding those dollars.
  • #5
  • Feb 24, 2011 4:46pm Feb 24, 2011 4:46pm
Market's wisdom is infinite,
AUDNZD was already waiting at demand (support level) for earthquake to kick in...
  • #6
  • Feb 24, 2011 8:21pm Feb 24, 2011 8:21pm
Quoting Greenhaze
That is not entirely true. While it might not have larger effects in the long run, you need to take into consideration amount of fear and panic that pours into the market in short amount of time. Would you want to hold nzd dollar knowing that there is even a slight chance of lowering interest rates just to pump some money into the damaged infrastructure. As the interest rates were raising in NZ before , there must have been some optimistic investors holding those dollars.
I think the earthquake will affect forex trading after 1 month or so. Not immediately.
  • #7
  • Feb 25, 2011 2:03am Feb 25, 2011 2:03am
Quoting information
I think the earthquake will affect forex trading after 1 month or so. Not immediately.
I dont have to prove anything here, just look at the NZD/chf/jpy charts 5 mins past the earthquake starts. Everything is there and its painfully obvious.
  • #8
  • Last Post: Feb 25, 2011 4:50am Feb 25, 2011 4:50am
Quoting SnapCracklePip
IMHO...... earthquake very little impact.....new zealand not much of an impact at all......earthquake in china or japan maybe. But currently the oil and gold markets are in panic mode i think oil mainly is driving commodities and currency at the moment
Agree with this opinion.

If something happen in USA - there is huge impact on the market. Do you remember 9/11. And what was going with all USD related currency pairs.
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