Potential US Shutdown Inspires Market Movement


Pound Sterling

With UK house prices surging by the most for six years, the Pound extended gains against the US Dollar and Euro prior to the release of domestic mortgage approval data. Sterling continues to derive support from last week’s hawkish comments from the Governor of the Bank of England and could rally further if this week’s UK PMI continues the recent trend of surprising to the upside.

GBP/EUR is trading in the region of 1.1955 and GBP/USD is trading in the region of 1.6132

US Dollar

The US government is running out of time to agree on the nation’s budget, and if it fails to reach an accord by midnight the political hub of the world’s largest economy could shut down for the first time in nearly twenty years. The ‘Greenback’ consequently fell to a month-low against the safe-haven yen and softened against peers like the Pound. Although today’s Chicago PMI will be of interest, US political concerns will be the main driver of market movement today.

USD/GBP is trading in the region of 0.6199 and USD/EUR is trading in the region of 0.7413


The Euro began the local session trapped in a bearish relationship with several of its most traded peers as fears of political collapse in Italy weighed on the common currency. German retail sales figures, which showed a smaller-than-forecast increase, had little impact on the Euro, but Eurozone inflation figures could trigger volatility.

EUR/GBP is trading in the region of 0.8365 and EUR/USD is trading in the region of 1.3489

Australian Dollar

With higher-risk assets losing their appeal in the face of a potential US political meltdown and China’s HSBC/Markit manufacturing PMI failing to reach the level expected, the Australian Dollar softened against the majority of its rivals during local trading. While US developments will be headline news, tomorrow’s Australian AiG PMI could also inspire ‘Aussie’ movement.

AUD/GBP is trading in the region of 0.5765, AUD/EUR is trading in the region of 0.6897 and AUD/USD is trading in the region of 0.9297

New Zealand Dollar

Fears that the US government could shut down and cause a major setback in the nation’s economic growth caused ‘Kiwi’ declines during the Australasian session. Disappointing Chinese manufacturing data also adversely affected the South Pacific asset, although surging domestic business confidence lent the New Zealand Dollar support.

NZD/GBP is trading in the region of 0.5121, NZD/EUR is trading in the region of 0.6126 and NZD/USD is trading in the region of 0.8266

Canadian Dollar

Ahead of the release of Canadian GDP data the ‘Loonie’ softened against its US counterpart. While US budget issues will be a major focus for investors in the hours ahead, if the Canadian economy expands by the 1.2 per cent expected the ‘Loonie’ may recover some ground.

CAD/GBP is trading in the region of 0.6008, CAD/EUR is trading in the region of 0.7190 and CAD/USD is trading in the region of 0.9697

These exchange rates were correct as of 09:30 am

Richard Martin
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After working in business development for a major UK currency brokers for several years, Richard left Britain to help set up the company’s Australian office and now lives and works in Queensland; making the most of his new Down-Under lifestyle.