Everyday money

One way terrorists can’t mess with your holiday plans

May 24, 2017

The British pound is still stable.

The British Pound had a momentary drop yesterday following the terror attack at Manchester Arena before recovering through the course of the day.

In spite of the horror, the market impact was limited with Pound Sterling maintaining values well within recent ranges and trends as it went on to normalise fairly quickly.

However, it briefly slipped against both the dollar and the euro.

Read more: New warnings for Aussies visiting the UK.

It fell as low as $1.2951 in morning trade in London – down 0.3 per cent on the day, but recovered to trade at $1.3024 at market closing time.

The GBP/EUR exchange rate saw an eight week low when it fell 0.2 per cent lower at 86.61 pence per euro but then went on to put in an impressive performance when it rose to 1.1600.

This is the worst attack England has seen since the London bombings in 2005 when 56 people, including the four suicide bombers implicated, were killed.

Suspected suicide bomber Salman Abedi, 22, exploded a home-made bomb at singer Ariana Grande’s concert yesterday, killing himself and 22 others, including an eight-year-old girl, and injuring as many as 120.

Despite the tragedy, IG Index head of research Chris Weston said the slight drop of the British Pound yesterday as a result of the attack would probably not have a long term effect on its value.

“The pound had a very momentary and small drop yesterday…(but) this is not going to alter retail spending in any kind of dramatic fashion,” Weston said.

“Unless it becomes an ongoing tend (but) I don’t think monetary policy will alter as a result because this is a humanitarian story and could happen anywhere in the world.

“You’d expect people in the UK to rally around each other and show some solidarity in this situation.”

The attack has also seen the halt to campaigning for the upcoming general election indefinitely.

“We could see a bout of nervousness regarding the terror threat, but it’s likely to be minor,” Shane Oliver, head of investment strategy at AMP Capital in Sydney, told Reuters.

“Ever since 9/11, the impact on markets from terrorist events has been declining.”