How will the terrorist attack at the Zaporozhye nuclear power plant affect financial markets?
With every year of life you become more and more pessimistic and begin to believe in the worst, and this is not surprising.
Just a few years ago, no one believed in the possibility of a global war between Russia and Ukraine, but the conflict has already lasted more than a year.
Now they are talking about the high probability of a terrorist attack at the Zaporozhye nuclear power plant, and no matter how sad it is, it should be recognized that such a possibility exists.
If a radiation leak occurs at this facility, the event will affect not only the environment and human health, but also financial markets.
How will stock exchanges react to the destruction of nuclear power plants?
Stock markets - after the event, the value of most securities will go down, but shares of companies producing drugs that reduce the effects of radiation or producing means of protection against radiation exposure may soar.
Commodity markets – here there will be an increase in prices for agricultural goods, such as wheat, peas, barley, sunflower and sunflower oil.
Ukraine is one of the largest producers of these goods, but after radiation contamination, it is unlikely that anyone will want to buy its products. Therefore, the price will remain at a high level for quite a long time.
Foreign exchange market - the main blow here will be on the Ukrainian hryvnia, the currency will collapse to new lows. The Russian ruble will also suffer, since Russian territory is quite close to the facility.
With a high probability, the EUR/USD currency pair will react with a downward trend to this tragic event, the US dollar will strengthen and the price of the euro will decrease.
Precious metals – this market segment traditionally responds to negative events with growth. At such moments, investors prefer to buy gold bars, getting rid of dubious securities.
Therefore, a sharp jump in the price of gold, followed by a pullback after the situation stabilizes, is natural. The current price of gold is XAUUSDXAUUSD .
Cryptocurrency – this asset is a refuge in crisis situations; if the Zaporizhzhya nuclear power plant is destroyed, this will cause an increase in demand for major cryptocurrencies.
People will try to move away from the epicenter of the tragedy, using the most convenient option to move funds - cryptocurrencies .
Taking into account the above, you should be prepared that sharp fluctuations in rates can trigger stop orders or lead to significant losses on open positions. It is also possible to stop trading on some exchange platforms or switch trading to the “ CLOSE ONLY ” mode.
Therefore, you should be prepared for probable scenarios of developments and secure your positions in advance.