16 October, 2013
Nothing new has emerged so far on the US debt ceiling talks less than a day before the deadline when the US government will no longer have the ability to borrow money, putting it risk of defaulting on its obligations. Warren Buffett compared the debt ceiling to the “atomic bomb”.
Investors are being cautious and are still hopeful that a deal will be reached at the last minute. This comes after Senator Harry Reid made assurances 48 hours ago that a deal was near.
As a result, markets are not as jittery and appear to be relatively calm, even after a brief bombshell announcement from Fitch Ratings agency yesterday that it could downgrade the nation’s top AAA credit rating.
Meanwhile, assurances from Washington are helping limit dollar losses and it has been trading close to a two-week high against the yen in the last two days.
The dollar /yen was up 0.2 percent at 98.35 yen and close to a two-week high of 98.73 hit on October 1st.
Sterling was the best performing major currency today as a result of a boost by an upbeat UK employment report. The number of jobless Britons fell by the most since 1997 and more than half that was forecast. Cable rose to a one-week high of $1.6060.
The euro was up as well today, moving off yesterday’s low by over 70 pips and peaking at $1.3534 in the European session today. Euro zone CPI data showed no surprises so it had little effect on the currency.
The US session has very little key data releases due to the US government shutdown but any headlines from Washington would be a big mover for FX markets.
The Asian session was calm as the economic calendar was light and most investors were positioning ahead of key risk events later this week, primarily the US nonfarm payrolls report on Friday...
The first full trading week of 2014 began today, with Japan opening for the first time after a two-week holiday...
The pair extended the positive trading, whereas it approached 61.8% correction at 1.3625
The dollar rose above 102.00 yen for the first time since May 29, while the euro flirted with the key $1.36 handle and hit a new four-year high within striking distance of 139.00 yen...
The best performing currency during Thursday’s Asian session was the Australian dollar which jumped against its US counterpart after strong Australian business spending data. Private Capital Expenditure increased by 3.6% quarter-on-quarter despite expectations for a decline by 1.1%...
The main currency of the day was the sterling which outperformed against the dollar and euro, as well as against the yen after being boosted by strong UK second quarter growth data...
The euro was stronger today particularly against the dollar and the pound. While there were no economic data releases today from the Eurozone to explain the move, there were some headline news which affected sterling and dollar...
The yen was supported by safe haven demand today after the release of a slightly dovish Bank of Japan policy meeting minutes. The minute from last weeks meeting showed some concern about Japans economic outlook and whether the central bank 2% inflation target could be met...
The dollar remains bullish against the yen, while the euro hit a new four-year high against the Japanese currency in todays Asian session...