Hurricane Ian path has left Cuba powerless and still headed to weUSA, Be careful!

Natural events such as floods and hurricanes occur and leave destruction in their wake, yet there is nothing we can do to stop them. Floods cause significant damage property, significant loss of life and can temporariliy derail economic actitvity which is why we should be weary when we withness such an event occur. Today we have Hurricane Ian which has already hit parts of Cuba and its path is set to hit parts of the United States. How will this affect the markets today？

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Hurrican Ian

This category 3 hurrican started yesterday and has already hit Cuba. The floods and strong winds hit disrupted electricity supply for the whole country. This this very bad for the Cuban economy as there are businesses and homes which are depent on that power supply, so we should expect the Peso to take a hit. If you are into trading exotics you can take a look at the MXNUSD.

The hurricane is still growing even stronger and is expected to hit parts of America further on today. There is a lot of property damage expected to hit the coast lines of South West of America. These towns and cities which are within the hit Zone, eg Port Challorette and Port Mayers are expectd to receive the grunt of the damage and parts of America are expected to experience power outages.

This is bound to haave an effect on the dollar today as it is well know that natural disasters are amongst the biggest fundamental events that move the market. The impact of the power cuts and the disruption to economic activity can cause a aweakening of the dollar. When the hurrican hits today, we should expect to see a sudden surge in volotility in the market. So for major pair such as GBPUSD and EURUSD, we should expect some usual activity during the New York market open.

If you are a risk taker you can try gain from the volatility, but I highly recommend that your risk management is very tight and you have stop losses and take profits as the market may very well turn on you. At this point I recommend also guarding profits and placing stop losses to your trades. Things can trun in your favour or turn against you very quickly so be very careful today. So may even choose to sit out the markets, there is no need to trade. There are higher chances of losing your capital and uncommon trading conditions so you can just sit it out. There will be pips tomorrow and the next day, it is not a big deal. Just whatever you choose, keep an eye on the market and learn something today.