Pound undermined by outbreak of swine flu

A deadly outbreak of swine flu has killed more than 100 people in Mexico, with infections reported in the US, Canada and possibly six other countries. Uncertainty over the scale of the outbreak has cranked up risk aversion, hitting higher-yield currencies like the euro and sterling, whilst at the same time boosting the dollar and the yen as a safe-haven play. Global equity markets have also been affected by the outbreak this morning, with airline, holiday and leisure stocks all taking a particular hit. It would appear that only once the extent of the outbreak is known, or authorities start to bring it under control, will investor jitters on this issue subside.