Currencies in tight ranges as US debt talks dampen sentiment

October 14, 2013

Currency markets saw little movement during European session trading on Monday, with major currency pairs basically keeping within ranges formed in the prior Asian session.

The US debt debate remains the dominant theme and is the main driver of markets today in the absence of other key economic data releases or headlines. 

Lack of progress in negotiations in Washington over the weekend to avert a debt default is making investors cautious and is keeping the US dollar under pressure. The safe haven currencies like the yen and Swiss Franc are benefitting, while commodities, like oil are also under pressure.

The US debt talks overshadowed the only data release today during the European session, which was industrial production data. There was little reaction to the report that showed Euro zone factory output in August grew at its strongest pace in two years.

The US dollar is down 0.3 percent against the yen, trading the European session in a very tight range around the 98.25 yen level after opening in Asia today with a 30 pip gap lower.

The dollar also slipped against the other safe haven, which is the  Swiss Franc, down 0.1 percent to 0.9114 Francs. 

The euro was lifted after the Euro zone industrial production data and also due to the weaker dollar, traded slightly higher by 0.1 percent to $1.3560.

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