Published: 15 Oct at 5 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, USA, Canada, Germany, India,
After feeling the pressure in the three weeks since the US government entered a partial shutdown, hopes of political resolution have helped the US Dollar advance on peers like the Euro and Yen.
While the debt ceiling impasse has seemed insurmountable at times, it appears that days of posturing and delays will finally end with US lawmakers reaching an agreement just ahead of the October 17th deadline.
Representatives from both sides of the fence have intimated that a deal is near, with former Treasury Secretary Lawrence Summers asserting ‘We will not default [...] I am as certain as anything that any Dollar of interest will be paid, and paid on time.’
Similarly, one Washington based market analyst asserted; ‘We could see a deal in Senate as early as today. The optimism is helping support the Dollar against the Euro and Sterling, and it’s also having a positive impact on risk’.
During the European session the ‘Buck’ climbed by 0.5 per cent on the Euro, the USD/EUR pairing’s first gain in three days, aided by this morning’s disappointing ZEW gauge of current situation sentiment in Germany
The safe-haven US Dollar also advanced on the Rupee for a second day as yesterday’s disappointing Indian inflation report continued to take a toll.
In other currency news, Canada
’s Dollar advanced to a one-week high against its North American rival as domestic existing home sales climbed and hopes for progress in the US supported Canada’s economic outlook ahead of Friday’s inflation data.
While US developments will be the key cause of market movement in the days ahead, tomorrow’s UK employment data will also be highly influential for the Pound.
Since the Bank of England tied the employment rate to interest rate increases, intimating that a hike won’t be considered until the unemployment rate has dropped to at least 7 per cent, UK jobs data has increased in importance and a surprising result tomorrow could inspire significant Sterling volatility.
As of Tuesday, 15th October 2013, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.1823, GBP USD exchange rate was 1.5992, GBP CAD exchange rate was 1.6597, and GBP INR exchange rate was 98.5616.