Global markets react to Osama bin Laden killing

News that Osama bin Laden has been killed in a US operation had an immediate impact on markets around the world - with video.

A crowd gathered in New York's Times Square reacts to the news of Osama Bin Laden's death early Monday morning. Tina Fineberg / Associated Press

Osama bin Laden: US president Barack Obama has announced that the world's most wanted terrorist has been killed

Last Updated: May 2, 2010

Osama bin Laden obituary

Bin Laden used a family inheritance to build the global terrorist network that killed almost 3,000 people in September 11, 2011.

The news appeared to have provided a reason for investors to unwind extended positions in many assets, including very short dollar positions in holiday-thinned Asian trade.

Earlier, investors had a taste of how vulnerable overbought assets can be to a sudden sell-off when silver dropped 10 per cent after hitting a record high last week and the Australian dollar slumped nearly a full cent after reaching a post-float peak of $1.1011.

The so-called Aussie and the New Zealand dollar - the kiwi - dropped as the announcement pushed up US stock futures, boosting the allure of assets in the world's largest economy. Australia's currency also declined as the central bank is forecast to keep its benchmark interest rate at 4.75 per cent tomorrow, according to 21 of 22 economists surveyed by Bloomberg News.

"This is good news for the US, and that means the dollar gets bought," said Kuniyuki Hirai, manager of foreign-exchange trading at Bank of Tokyo-Mitsubishi, a unit of Japan's largest lender. "This may reduce the burden of US military expenses and prove that Obama's operation was right."

With agencies