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Dollar strengthens, oil price falls on news of Bin Laden’s death

Osama Bin Laden, head of the al Quaeda terrorist organization, was killed in a US operation in Pakistan, US President Barack Obama announced yesterday.

Al Qaeda leader Osama Bin Laden was killed in a firefight with U.S. forces in Pakistan on Sunday, the US President announced yesterday in the White House. The head of the militant Islamic group was shot in the head, a source familiar with the U.S. operation said. His death was confirmed separately by officials in Pakistan. US Navy seals and Pakistani deals were involved in the military operation.

Obama said U.S. forces led a targeted operation that killed Bin Laden in a compound in Abbotabad, a densely populated urban zone north of Islamabad. No Americans were killed in the operation and they took care to avoid civilian casualties, Obama said. The fight took under 40 minutes in which four other people were reportedly killed, including Bin Laden’s son and a woman. According US officials, it took more than four years to track down Bin Laden’s residence.

Since the announcement, thousands of Americans have been celebrating on the streets in several major American cities. The international community also had a strong reaction. The killing of Osama Bin Laden by US commandos is a "victory for all democracies," Italian Prime Minister Silvio Berlusconi said. British Prime Minister David Cameron said Osama Bin Laden's death will "bring great relief to people across the world." French president Nicolas Sarkozy called the death of Bin Laden “a major event in the fight against terrorism”.  According to German chancellor, Angela Merkel, the United States military had dealt a "decisive blow" against al-Qaida but warned that international terrorism had not been beaten yet.

The US government has issued a worldwide travel alert fearing potential retaliation targeting US citizens. US embassies and citizens in certain countries are especially encouraged to be on their guard as the likelihood of anti-American reprisal attacks has grown, the US State Department warned.

The news of al Quaeda leader’s death has had a positive impact on the market. Stocks worldwide have risen. Reduced security risks facing the United States lifted the dollar from a three-year low and raised stock index futures. U.S. crude oil prices also fell. Risk premiums making the current oil prices high may fell in the future, some experts said. However, some analysts warned the market impact would be short lived.

The forint traded at 263.78 to the euro shortly after on Monday on the interbank forex market, strengthening from 264.27 on Friday afternoon.

Futures for the S&P 500, Dow Jones futures and Nasdaq futures were up 0.7 to 0.8 percent.

In Asia, Japan's Nikkei 225 index gained 1.6%,

Major European blue-chip stock indices were in positive territory at midday, with London's FTSE-100 up 0.03% and Frankfurt's Xetra DAX up 0.88%. The BUX's central and eastern European high-cap peer indices were mixed at noon, with Prague's PX-50 up 0.41% and Warsaw's WIG-20 down 0.22%.

It is questionable whether there will be a new overall leader for al Quaeda.

Nevertheless, the fight against al Quaeda continues, Obama stressed.