The US Dollar gained advances against all the major currencies of the world, after Barrack Obama declared in a press conference that the leader of the AL-Qaeda, Osama bin Laden, has been killed in Pakistan. The USD-JPY exchange rate rose by 0.4064 percent to its value of 81.5220. The Euro-USD exchange rate dropped by 0.2006 percent to 1.4778.
News about bin Laden’s death improved confidence and optimism in the major stock markets of the world. The threat of terrorist activities is one of the major reasons which prevents investors from investing in riskier, higher yielding assets in other countries. With bin Laden now dead, investors are hopeful that this would weaken the Al-Qaeda’s ability of recruiting fighters throughout the world, with a consequent decline in terrorist activities. Hence, there was an increase in the stock market indexes, with investors opting for investing in higher-yielding assets. The US Dollar also appreciated due to increased optimism in the market and an increased demand for riskier US assets.