Dollar and euro under pressure on political woes

September 30, 2013

It was a busy weekend in terms of news and markets inevitably opened with a cautious note in early trading on Monday. 

Political issues in the United States as well as in Europe has jolted the dollar and the euro and gave a boost to the safe have Japanese yen.

Over in Washington DC, the Republicans and Democrats were unable to come to an agreement over a spending bill, and the US government is now at risk of a shutdown. 

This put the pressure on the dollar, and it fell to a one month low against the yen today after opening the Asian session with a gap down from Friday’s close.

USDJPY touched a low of  97.62 compared to Friday’s close of 98.19 yen and was unable to rise above 99.00 yen resistance. 

Political trouble in Italy also kept markets on the defensive. The Italian government teeters on the verge of collapse after supports of Silvio Berlusconi's centre-right party resigned from the  government on the weekend. 

The euro fell against the dollar as a collapse of the Italian government could result in elections and also a downgrade in the nation’s credit rating.

EURUSD dropped to $1.3491 compared to Friday’s high of $1.3563.

Sterling was unaffected by and in fact rose against the dollar and euro since it was seen as a safe haven asset. GBPUSD opened at $1.6141  and rose to a high of $ 1.6180.

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