Currency Note Worldwide

Risk appetite drives the market as the US avoids defaulting on its debt

By Ricky Bean October 17th, 2013

Elsewhere yesterday we saw the Japanese yen keep close to the two-week lows against the US dollar on Tuesday as renewed appetite for risk drove the market amid hopes that US congress would reach a deal in time to lift the nation’s credit limit. This appetite for risk has prompted traders to sell off the traditionally safe-haven Japanese yen after 2 weeks of high demand for the currency, whilst buying higher-yielding currencies such as the Australian dollar which held the 4-months highs it achieved on Tuesday. The Australian dollar was also buoyed by Tuesday’s release of the central banks meeting minutes which gave little mention of further interest rate cuts this year. We saw the Canadian dollar log gains against its US counterpart as commodity prices firmed, spelling good news for the export-reliant economy, whilst the imminent resolution to the situation in the US helped boost demand for the Canadian dollar, with the United States being Canada’s primary export destination. Today is a quiet day data-wise, but there could still be a great deal of movement as the global markets continue to react to the news that the US has avoided defaulting on its debt. Get in touch with your traders for updates and live rates