Currency Note US Dollar

No agreement, more pain coming

By Smart Currency October 2nd, 2013

The US dollar struggled yesterday, as it felt the full force of the situation in its own government. The fallout from the partial shutdown continued, as the dollar hit new lows against both sterling and the euro. At present, the repercussions of this are largely limited to the US, as the shutdown is expected to damage the growth of its own economy at an estimated level of $300 million per day. While the US moves closer to running out of money, a temporary budget is needed between now and 17th October, when the debt ceiling must be raised so that the government can borrow more money to avoid defaulting on its debt for the first time in history. Taking a back seat amongst all of this was economic data from the country, as yesterday saw encouraging manufacturing PMI help the currency try to scrape back its recent losses, although data showing the level of spending in the construction construction was withheld due to the shutdown. This has made the market nervous that Fridays key Non-farm payrolls data could also be withheld making it even less likely that the Federal Reserve will taper its quantitative easing program this month. Despite this, we are expected to see the ADP non-farm employment change released today; but, all eyes will remain focussed on the shutdown, and any possible resolutions of this situation. Get in touch with your trader now for an up to the minute price on the US dollar, as major nationwide events dominate.