By James McKee
The Middle Eastern nation of Libya has proven itself to be the worst off in a series of political revolutions throughout the region. Egypt and Tunisia have already seen regime changes brought on by massive public demonstrations that have ignited the Arab world with a desire to end their undesirable living conditions. This series of conflicts has spelled out an out of control oil price due to a complete shutdown of Libyan oil exports. Italy’s close ties to Libya and importation of Libyan oil has resulted in more serious financial consequences for Italy than other countries in the Western world.
The Euro has been suffering as a result not only of one of their members’ ties to Libya, but also skyrocketing oil prices. The EUR stands to drop even further as the Libyan conflict heats up, there have already been thousands killed for the protests that have occurred so far. Libyan revolutionaries have captured half of the country so far, so it seems highly unlikely that this conflict will end anytime soon. While it is true that a shortage in oil affects all Western currencies there are some that will fall faster than others.
The Euro and USD will fall the fastest; Europe has the most direct ties to Libya while the US is the world’s most voracious consumer of everything…including oil. Once the oil prices skyrocket US goods will become more expensive almost immediate due to increased costs across the board. Those on the Forex currency exchange should keep a close eye on Libya as well as the cost of crude oil that is vital to price of all Western currencies. The nation of Libya could just be the third in a series of Middle Eastern regime collapses as time goes on. There are signs of civil unrest occurring in Saudi Arabia already.
About the Author
Author is a Forex trader and financial analyst residing in Denver, Colorado. To stay up to date on all the latest developments in the financial world and beyond be sure to check out the forex exchange rates regularly.
