Tweet

How the Swine Flu is Affecting the Dollar, Peso, and Yen!

Written by: Sean Hyman

Article Overview: On Monday, as I watched the media breed fear into the public, I also saw my charts going nuts. The “Swine Flu fear” was spreading from people, to the financial markets.

How the Swine Flu is Affecting the Dollar, Peso, and Yen!

On Monday, as I watched the media breed fear into the public, I also saw my charts going nuts. The “Swine Flu fear” was spreading from people, to the financial markets.

Fist I heard about hog and pork belly futures taking a blood bath in the trading pits due to the swine flu. (Commodity traders were scared that while this is all going on that the public would eat less pork than they otherwise would.)

Then later on, the stock market cranked up and I saw Smithfield Foods (SFD) gap down and lose over 12% in a single day. Tyson Foods (TSN) gapped down too and traded down almost 9% on the day too.
It was then that I switched over to my currency screens and brought up the Mexican peso (USD/MXN). The peso was getting slaughtered over the swine flu.

It not only broke the downtrend line as the peso dove, but it gapped noticeably higher on the daily chart and soared over 5.25% on the day.

But why? What’s the big deal about this flu and why should it affect a currency?
Here’s how the peso gets punished for the “Swine Flu”!

Mexico has had 159 Swine flu related deaths and there are 2,500 that have been diagnosed, 1,300 of which are in the hospital.

Economists estimate that it has slowed Mexico’s economy by 60% recently (or an estimated $87 million A DAY)! All 35,000 restaurants in Mexico City have been ordered shut and the schools are already closed down.
The fear that is spreading from Mexico, now to other parts of the world is growing at a rapid pace. After all, this is not just a Mexico epidemic. The Swine flu has already spread to the U.S., Canada, Germany, Israel, Spain, the U.K., New Zealand and Australia.

Therefore, the media has taken this opportunity to feed this fear in hopes that it turns into a frenzy. After all, that makes for great ratings.

Swine flu is common. It’s common in pigs and this same type of flu is even common in birds too. We even had a bout of swine flu back in the 1970s here in the U.S. and there was a vaccine given out in 1976 that some people may still have in their body today.

However, the problem right now is that there is no vaccine currently and it takes at least 3-6 months to make a vaccine

If this fails to be contained, it will continue to hurt Mexico’s hotels, restaurants, bars, churches, tourism in general and anything having to do with the pork industry, etc. After all, who’s going to go to Mexico while they know all of this is going on?

Matter of fact, even once the “coast is clear” again one day, I’d bet that tourists will still avoid the place for a while longer just to be on the safe side.

After all, do you remember the SARS virus in Asia. Even though they got it contained in a relatively short amount of time, it virtually shut down Hong Kong for about 6 months.

Therefore, this is not just a health issue (which is most important) but it’s also a financial issue. And a financial issue is also a sentiment issue. After all, would you buy the peso knowing that all of this is brewing in their country? Of course not, and neither will millions of other traders around the world…hence the rise of the USD/MXN pair.

Therefore the deterioration economically that it has on any country can weigh down its currency as well. After all, currencies are basically valued based off of sentiment and that sentiment is based off of how well investors think the economy is doing.

The peso gets punished while the buck and the yen catch a break!

So money is flowing out of the peso at a rapid rate and is fleeing to the U.S. dollar and the yen as the market becomes “risk adverse” yet again over this epidemic that investors feel could become a pandemic.
Therefore expect more money to flow out of the peso until this problem gets reigned in and expect money to flow towards the greenback which will continue to crush the USD/MXN pair.

Should this flu virus start spreading to other countries rapidly, then you can expect the yen to be a huge beneficiary since the yen seems to thrive off of fear these days. The dollar will benefit as a close runner up for the very same reasons.

Therefore, keep an eye on how bad this “swine flu” gets in the media and in “real life” as this story continues to unfold. Because a whole lot more currencies could be “dragged into this mess” if it’s not contained rather quickly.

Until there is a vaccine and containment, this will be something that is a factor that could affect any currency. Since viruses “know no boundaries”, you will want to keep an eye out for where this thing is spreading so that you know what currencies will be the most effected.

I’ve learned a long time ago to position myself to profit from forces that are outside of my control. So my trading will continue to stay on the side that profits from the Swine flu but in my heart, I pray that this is contained soon so that I can profit from dynamics that don’t affect the world’s most valuable assets: humans!

Sean Hyman

Related Articles
  Swine Flu Impacts More than Your Health
  U.S. Dollar Forecast for 2009
  Are You The Guy Who
  Bank Stress Tests?? What Stress?
  Investing Trick of the Pros: As goes Oil, So goes the Euro!

Article Tags: blood bath, canada germany, commodity traders, economists, epidemic, financial markets, flu, flu related deaths, frenzy, hog, mexican peso, mexico city, pork belly futures, rapid pace, single day, smithfield foods, stock market, swine flu, tsn, tyson foods



Related Forum Posts
Re: How does an entrepreneur stay energized? - Hi there, This subject is not only for entrepreneurs. Everybody can benefit from this, that is the reason why 'Healthy Living and Eating' is a multi billion Dollar business. Often I smile, because so much is written about it. So many different business are blooming and doing well. Whilst there is so much knowledge and opportunity to be healthy and well, the need is still growing. There is so much that could be said. The cheapest form of energy is gained by a good sleep.
Re: Best Internet Marketing Strategy - I wanted to share more on the topic of Blogging and creating your own original content that you enjoy writing about. Here's a real example. My wife started her own little Web site a few years ago. It's a very simple, home made Web site she built all on her own. She had sort of a hobby of going into Dollar stores, purchasing a few inexpensive items for a buck or two. Then she would create something completely new (usually home decor) out of what she bought (often with the same value of creating something that was worth up to $15 or $20) if you bought it in other stores, but only using material she bought at a dollar store. So on this little Web site, she starts writing about her creations and take pictures of them etc. A few years ago, someone from an AOL Money and Finance Blog (called Wallet Pop) invited her to Blog for AOL. Today, she write for both the US AOL Blog and the Canadian AOL Blog as well as she continues with her hobby and keeping up her own Web site. The other Bloggers at AOL have nick-named her, "The Dollar Store Diva" and she often writes about budget decorating. What amazes me is that with no SEO and just her original content, she attracts huge volumes of traffic. She has done radio shows in Toronto (and nearly went to the US to do breakfast television) and most people would be so amazed to see the traffic spike she gets from Blogging. But once again, she is just writing about the stuff she loves to write about. She is having fun with creativity and she now has a huge following of readers and subscribers.Others are decorating their homes with her ideas and their doing it with next to no budget. If someone is creating a Web site or a Blog, the best thing you can do is try something original on your own, but make it something that you love to write about.
Please help me before I give up!!! - Hey everyone, I am not really new to the idea of Affiliate Marketing but I have yet to make 1 Dollar. My latest venture involved registering a domain name and redirecting the domain name to my affiliate link. advertising of course, is my biggest problem. I have advertised all over the web. Some free, some paid for. I am seriously thinking of rolling the dice and spending a heap of money on a radio commercial or full page ad in a newspaper or magazine. Anyone think that’s a good Idea?? Or got any new ideas for a clickbank wannabe like myself?? ...Thanks!
$1,000,000 - Hi Evan, Are you talking about US Dollars? If so, that would be approx £500,000 in the UK. The Canadian Dollars differs also from the Australian Dollar. In any case, one needs to solve problems to help people to get money. The more solutions are given to people's needs to solve their problems, the closer one gets. Finally, are we talking about 'Income' or can we talk about 'Asset'? Kindest Regards Beat "Unlock People's Potentials!"
Top 50 Entrepreneurs Ever! - And the Top 50 Entrepreneurs of all time are… (In no particular order) Hugh Hefner – Obvious. Oprah – Born to a single mother in rural Mississippi, did what she loved and never let up. Popularized and revolutionized the tabloid talk show genre. Simon Cowell – Guy made millions off Karaoke. Jenna Jameson – Worth $70 million using only what god gave her. Henry Ford – Standardized efficiency. Thomas Edison – Numerous failures on the road to success. Perseverance! Adrian Block - 1612 establish the first known brewery in the New World on the southern tip of New Amsterdam (Manhattan). I live in a city with more than 30 breweries operating in the city limits…think these guys were onto something. Hans Christiansen – Partners with Adrian Block. Adam Osborne – Creator of the 1st personal computer. Howard Hughes – Say what you want about him the man had a vision and stuck to it. Madame C.J. Walker – 1st Female African American Millionaire…and she did it in early 1900’s. Safe to say she had a lot of obstacles, but persevered and prospered. If you think you have more working against you than Madame C.J. Walker did, think again. Mary Kay Ash – The woman behind Mary Kay cosmetics. Redefined affiliate marketing. Howard Schultz – Who’s gonna’ pay $4.00 for a cup of coffee? With $2.5 billion plus in total revenue the answer at Starbuck’s is a lot! Alexander Graham Bell – Inventing the telephone in 1876 was about as wacky an idea as teleportation is today…did that stop him? King Croesus – Minted the world’s first coin in 6th century. Benjamin Franklin – Author, printer, inventor, businessman. Ray Croc – Where do you go for dinner when you spent all your money on $4.00 Starbuck’s coffee? McDonald’s! Franchising and national expansion (both stores and waistlines) would never be the same. Sam Walton – Speaking of saving money and expanding like crazy. Sam Walton found a niche and filled it, regardless of what you think of the extra traffic Wal-Mart brings to your neighborhood. Ernest Gallo – Took what was once an exclusive product and repackaged it for the masses. I was 20 years old before I knew wine came in anything but a “jug”. William Middlebrook – Giving William the nod for inventing the paper clip, although some debate remains. However, you have to include the inventor of the paper clip in this list since we’ve all said, at one time or another, “and whoever invented the paperclip is rich, and I’m still working in this crappy office!” Bill Gates – Took a risk and was a first mover in a market that exploded. Steve Jobs – Make your products easy and people will love to use them…making a dead sexy laptop doesn’t hurt either. Mayer Amschel Rothschild – Started the world’s first international bank in the mid 1700’s. What did you do today? Scrooge McDuck - Scrooge has emerged from being a mere supporting character to a major figure of the Duck universe. Parlayed early success into his own comic book series, television appearances, films, and video games. As big as David Hasselhoff in Europe, he seized opportunity when it arose. Russell Simmons – Worth $325 million, and started as a teen street hustler. A hip hop pioneer and visionary who has shaped the hip-hop scene of the early 80’s, has branched off into fashion, television and film. And I don’t care if you grew up in Brooklyn or Beverly Hills you remember “Russell Simmons Def Comedy Jam”. Ron Popeil – Net worth in excess of $100 million dollars. A consummate salesman, he had us believing we NEEDED a food dehydrator and spray paint to cover our bald spot! The Phoenicians – Inventors of the sail boat, and could be credited then with giving our early explorers the means to take over the western hemisphere. H. Ross Perot – Used a $1,000 loan from his wife in 1962 to start Electronic Data Systems. Became a billionaire as computer systems drove the need for electronic data storage. JP Morgan – How many people get credited with having saved or rescued the U.S. national economy in general—and the federal government in particular—on two separate occasions? Not many, and JP was a merger monger legend in his time. Charles Schwab – Founder and CEO of the Schwab Corporation, made having a broker cool and accessible. Worth $5.5 billion for his efforts. Larry Page – Google, need we say more? Sergey Brin - Google, need we say more? Philip Knight – In partnership with Bill Bowerman created Nike. What’s the reward for taking a product everyone uses and making it functional and fashionable? Try a net worth in excess of $9 billion dollars. George Lucas – Start with a vision, add some talent, and never waiver. Stars Wars is as well known on this planet as Coca-Cola, and Lucas is worth a cool $3.6 billion. Doctor John Pemberton – Pharmacist who in 1886 invented Coca Cola. Forced to change his formula from including wine due to prohibition his elixir with “tonic and nerve stimulant properties of the coca plant and cola nuts sweetened with sugar” became a sensation. Eberhand Anheuser- Founder of Anheuser Busch Brewing and Budweiser beer…thank you sir for the many mornings where I regretted the night before. Adolphus Busch - Founder of Anheuser Busch Brewing and Budweiser beer…bless you for allowing me to think I am funny, great looking, and a fabulous dancer for a few hours every Saturday night. Jeff Bezos – Founded Amazon.com in 1994, and wrote up the business plan for his company on a cross country drive from New York to Seattle. Was a .com entrepreneur before there was even a term for it. Thomas Kinkade - Americas most collected living artist. Marketing works people. Erno Rubik - Invented a puzzle only .000001% of the world population could solve without cheating, and sold millions! Marketing works people. Alex Tew - 21 year old entrepreneur made $1,000,000 off the “Million Dollar Homepage”. Adding him to the list to illustrate that great ideas are sometimes in plain sight. Didn’t we all think, “I wish I had thought of that”? Henry Hassenfeld - Owner of a textile plant in 1923 his company struck gold when they developed a way for kids to play doctor. The first toy the plant ever produced led the way for the likes of Mr Potato Head, GI Joe, Life, Yatzee, Candyland, and just about any other game we played as kids. Partners with his brother Helal Hassenfeld. Helal Hassenfeld - Thanks for the memories man, I still get misty eyed thinking about Cobra Comander and the words “YO Joe” will live with me forever. Rollin King - In 1965 started a regional airline serving 3 Texas cities. 40 years later Southwest Airlines has 3500 flights a day and is the number one airline in the United States and the World by number of passengers carried. Herb Kelleher - Partnered with Rollin King to start Southwest Airlines. The guy started an AIRLINE COMPANY for crying out loud, that’s ballsy. Guy Laliberte - Made the circus cool again. Founder and CEO of Canda’s Cirque du Soleil, Laliberte founded Cirque in 1984, and revolutionized the idea of what a circus could be. Cirque du Soleil has toured more than 100 cities around the world. Admiral Zheng He - Built the vaunted Treasure Fleets, comprising dozens of ships and tens of thousands of sailors, and led them in trade missions across south Asia and as far west as Africa and the Strait of Hormuz in the Persian Gulf. In seven voyages from 1405 to 1433, Zheng He spread China’s goods across the world and returned with treasures for the Ming Dynasty. Andrew Carnegie - The Scottish immigrant and weaver’s son built a steel empire whose mills churned out the railroads, ships, and structures of post-Civil War America. Milton Hershey - In 1905 built the worlds largest chocolate factory. His name has become synonymous with chocolate, which Americans consume more than 11 pounds of each year. Gary Dahl - A millionaire for selling rocks, pet rocks, enough said.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

How do you keep it together on a daily basis?

Leading from Authenticity is a Beautiful Thing

Ten Twitter Tips For Work-at-Home Moms

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.