UNREST IN EGYPT AND SUEZ CANAL COULD HAVE MAJOR ECONOMIC IMPACT

Defense analysts agree that the Egyptian uprising against Hosni Mubarak does not yet threaten the Suez Canal, which remains essential to U.S. energy security. While Egypt is not among the region's oil producing nations, if the Mubarak regime is replaced by a strongly anti-American regime, access to the Suez Canal could hypothetically be restricted to tanker ships en route to energy markets in the United States. This would redirect American-bound oil tankers to a perilous 6-8 week trek around the Horn of Africa.

Dollar Strengthens Amid Egypt Turmoil & Euro Debt Crisis

The dollar strengthened against the euro for the 3rd week in a row and rose against the majority of its major counterparts as concern grew over the ongoing Egyptian unrest and the debt crisis in Europe.

Investors sought the relative safety of the dollar as speculation increased over Portugal’s funding costs rising to an unsustainable level along with Egyptian President Hosni Mubarak stepping aside and handing power over to the military. Investors were further encouraged to seek out greenbacks with positive U.S.jobs data recently released along with a forecast increase in January retail sales.