Hurricane Sandy, a huge storm heading to make landfall on the US eastern seaboard has the potential to become a ‘perfect storm’ and leave billions of dollars worth of damage in its wake.
Sandy has forced hundreds of thousands of people from the USA’s most densely populated areas to seek shelter and higher ground resulting in the closure of thousands of businesses, closure of schools and government departments. The New York stock exchange has also shut as the city battens down the hatches and prepares to ride it out.
Forecasters have been dubbing Sandy a hybrid or ‘Frankenstorm’ with many stating that they have never seen a storm of this type before. The system is a triple whammy of a full moon, Hurricane and a Storm front. It has been created by an Arctic jet stream wrapping itself around a tropical storm, possibly causing up to 12 inches of rain in some areas, as well as up to 3 feet of snowfall in the Appalachian Mountains from West Virginia to Kentucky.
Sandy has brought heavy rain, strong winds, and heavy snow in higher altitudes and storm surges and has killed 66 people as it ravaged its way through the Caribbean. Fears are growing that the hurricane will cause extensive flooding to low lying regions and some areas have called for mandatory evacuations. New York City and other cities have closed their transit systems with officials ordering people in coastal towns and low-lying areas to evacuate, often telling them they would put emergency workers’ lives at risk if they stayed.
“Don’t be stupid, get out, and go to higher, safer ground,” New Jersey Governor Chris Christie told a news conference.
Winds of up to 85mph have already been recorded in some areas. Concerns are growing that the storm could grow in intensity as it continues to move over the warm waters of the Gulf Stream. Property has already been damaged in the state of South Carolina as strong winds and exceptionally high tides grow in strength.
“This is not a typical storm,” said Pennsylvania Governor Tom Corbett. “It could very well be historic in nature and in scope, and in magnitude because of the widespread anticipated power outages, and the potential major wind damage.”
The US economy is set to be impacted strongly with most transportation grinding to a halt, airlines cancelling flights and the effective shutdown of many Federal governmental departments.
“This is a serious and big storm,” President Obama said after a briefing at the federal government’s storm response centre in Washington. “We don’t yet know where it’s going to hit, where we’re going to see the biggest impacts. Utility companies from the Carolinas to Maine reported late Sunday that a combined 14,000 customers were already without power.
The second-largest oil refinery on the East Coast, Phillips 66’s 238,000 barrel per day (bpd) Bayway plant in Linden, New Jersey, was shutting down and three other plants cut output as the storm affected operations at two-thirds of the region’s plants.
Oil prices slipped on Monday, with Brent near $109 a barrel. “With refineries cutting runs, we’re likely to see a build-up in crude stocks which could be driving bearish prices at the moment,” said Michael Creed, an economist at National Australia Bank in Melbourne.
The brunt of the storm is due to hit the region throughout the remainder of the day and night. The extent of the damage it causes will not be known until tomorrow. As a result we can expect the currency markets to highlight this with fluctuations in the strength of the US Dollar and the commodity based Canadian Dollar.
As of 10:15 am
The Pound to Euro exchange rate is currently trading at 1.2444
The Pound to US Dollar exchange rate is currently trading at 1.6060
The Pound to Australian Dollar exchange rate is currently trading at 1.5503
The Pound to New Zealand Dollar exchange rate is currently trading at 1.9551
The Pound to Canadian Dollar exchange rate is currently trading at 1.6051
The Pound to Japanese Yen exchange rate is currently trading at 127.7600
The Euro to US Dollar exchange rate is currently trading at 1.2906
The Euro to Pound exchange rate is currently trading at 0.8035
The Euro to Australian Dollar exchange rate is currently trading at 1.2459
The Euro to New Zealand Dollar exchange rate is currently trading at 1.5712
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