In a fateful incident during a riot in Butler, Pennsylvania on Saturday, former President Donald Trump was injured in an assassination attempt.
Several shots were fired during Donald Trump’s rally, one of which tore off the top of his right ear.
Trump was immediately taken to a more secure location by the Secret Service and the shooter, whom authorities only identified as a Pennsylvania man in his 20s, was shot dead by law enforcement.
Citing law enforcement sources, NBC News reported that one spectator died and two others were in critical condition.
US President Joe Biden condemned the shooting, saying “there is no place in America for this kind of violence.”
Former US President Trump later issued a statement saying he was “doing well” and was undergoing a medical check-up.
“I knew immediately something was wrong because I heard a whizzing sound, gunshots, and immediately felt the bullet tearing through my skin. I was bleeding a lot and then I realized what was happening. GOD BLESS AMERICA,” he added.
House Speaker Mike Johnson, meanwhile, has said he will “conduct a full investigation into the tragic events” that occurred during Trump’s rise.
Consequences for markets
Financial markets could see some risk aversion at the weekly open, putting a fresh bid under the US Dollar. Risk currencies such as the Australian Dollar and the British Pound could see some pullback after the previous week’s strong performance, while the price of Gold and the Japanese Yen could benefit from the early flows of risk aversion.
However, the risk-off sentiment could soon dissipate as attention shifts back to expectations surrounding interest rate cuts by the US Federal Reserve (Fed) and China’s economic outlook, with second-quarter gross domestic product (GDP) data due out early on Monday.
The feeling of risk FAQs
In the world of financial jargon, the two terms “risk-on” and “risk-off” refer to the level of risk that investors are willing to bear over the reference period. In a “risk-on” market, investors are optimistic about the future and are more willing to buy risky assets. In a “risk-off” market, investors start to “play it safe” because they are worried about the future and therefore buy less risky assets that are more certain to provide a return, even if relatively modest.
Typically, during periods of “risk appetite”, stock markets rise, and most commodities – except gold – also appreciate as they benefit from positive growth prospects. Currencies of countries that are major commodity exporters strengthen due to increased demand, and cryptocurrencies rise. In a “risk-off” market, bonds rise – especially major government bonds –, gold shines, and safe haven currencies such as the Japanese Yen, Swiss Franc and US Dollar benefit.
The Australian Dollar (AUD), Canadian Dollar (CAD), New Zealand Dollar (NZD) and minor currencies such as the Ruble (RUB) and South African Rand (ZAR) tend to rise in markets where there is “risk appetite”. This is because the economies of these currencies are highly dependent on commodity exports for growth, and these tend to rise in price during periods of “risk appetite”. This is because investors anticipate higher demand for commodities in the future due to increased economic activity.
The major currencies that tend to rise during periods of “risk aversion” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The Dollar, because it is the world’s reserve currency and because in times of crisis investors buy US government debt, which is considered safe because the world’s largest economy is unlikely to default. The Yen, because of increased demand for Japanese government bonds, since a large proportion are held by domestic investors who are unlikely to part with them, even in a crisis. The Swiss Franc, because strict Swiss banking legislation offers investors greater capital protection.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
