020 7898 0500The US dollar staged a recovery on Friday despite there being no resolution to next years budget talks and with the 17th October debt ceiling deadline looming when the US is due to run out of money and in turn default on its debt. Furthermore, due to the partial government shutdown in the US, the highly influential Non-farm payrolls data was not released. In spite of this negative rhetoric, the US dollar strengthened as investors bet that the situation would be resolved shortly and as traders closed off positions before the weekend. If there is no quick resolution, you would expect this rally to reverse and the US dollar to come under significant pressure as the 17th October deadline gets ever closer. This week, the main influence on the US dollar will be surrounding any developments, or lack thereof, with regards to the US budget situation. Outside of this, traders will look towards the release of the minutes from the latest Federal Open Market Committee (FOMC) meeting which should provide clues as to when the FOMC may taper its quantitative easing program. Other important figures that are due to be released includes the consumer sentiment statistics, the weekly unemployment claims figures and a 10 year bond auction – which should be interesting as the world starts to wonder if the US political deadlock could genuinely cause the US government to default on its debt. Call in now for the latest update on the budget crisis in the US.
