How forex reacts to the news

How do you measure the impact of a news story? In a world of Brexit, Trump and trade wars stories that would have once been a saga running for months race to the top of the agenda for mere hours. Recent times have seen a steady stream of sackings, snap elections and scandals – some that we might have forgotten about already. How long ago, for example, does it seem since Donald Trump fired FBI boss James Comey? Could you even name the seven cabinet ministers to have left in the year since the last UK General Election?

 

While the political fallout is often measured in the polls – be they opinion polls or actual elections – there are other ways to judge whether a story was significant.

 

DailyFX has looked at 59 major news stories between April 2017 and April 2018 from six key world leaders and assessed the impact on the currency markets and Google searches. Its interactive guide shows how some of the things politicians do and say have a negative impact on their currency (such as Theresa May’s failure to secure a majority after taking a snap election), some have minimal impact (when Australian Prime Minister labelled the North Koreans ‘criminal’) and some are positive (when Shinzo Abe won a snap election to secure his position as Japanese Prime Minister).

 

While the long-term judgement of recent events will wait for the history books, projects such as this help to show the instant economic impact of the actions of politicians in the era of the 24/7 news cycle.

 

 

Disclaimer: This content does not necessarily represent the views of IWB.

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