The United States is at risk of losing its prized triple-A rating after Fitch ratings agency announced it placed the country on notice for a downgrade.
Debt ceiling talks stalled again last night as lawmakers in Washington squabbled over the conditions for raising the US government’s debt limit. By tomorrow, October 17th, the US government will no longer have authority to borrow, putting it at risk of defaulting very soon on its payments and obligations, which would result in market turmoil.
In an official statement, Fitch said the following:
"Although Fitch continues to believe that the debt ceiling will be raised soon, the political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default."
Investors are jittery and are being cautious, resulting in alot of trading ranges in most currency pairs. The dollar/yen has been swinging back and forth from a two-week high since yesterday. In Asia this morning, the pair bounced from 98.12 to 98.62 around where it consolidated.
Dollar advanced against the euro by 0.1 percent to $1.3515. But the euro gained versus yen by 0.3 percent to 133.09.
Gold was back up as investors rushed to safety, lifting its price by over $7 to back above $1,280 an ounce.Publication source