US Default Averted, but Political Uncertainty Remains

money_united_states_dollars

Pound Sterling

After rallying yesterday in response to surprisingly strong UK employment figures, the Pound extended gains against a broadly softening US Dollar this morning as lawmakers reached an agreement to avert a default and investors looked ahead to today’s retail sales report. Sterling was also trading higher against the Euro.

GBP/EUR is trading in the region of 1.1782 and GBP/USD is trading in the region of 1.6040

US Dollar

After US lawmakers made a last-minute deal, bringing an end to the partial government shutdown and ending default fears, the US Dollar softened against peers like the Euro and Pound and posted a notable decline against the Yen. The prospect of the publication of all the data releases which were delayed by the political fracas will keep pressure on the ‘Buck’ in the hours and days ahead.

USD/GBP is trading in the region of 0.6228 and USD/EUR is trading in the region of 0.7345

Euro

The Euro began the local session stronger against the US Dollar but little changed against the Pound. With today’s Eurozone data releases (construction output and current account figures) not expected to inspire much of a response, the EUR/GBP pairing will be driven by the UK retail sales report while the EUR/USD pairing could fluctuate in response to additional US announcements.

EUR/GBP is trading in the region of 0.8485 and EUR/USD is trading in the region of 1.3616

Australian Dollar

In the aftermath of US congress voting to increase the nation’s debt limit, higher risk assets like the ‘Aussie’ were supported and the currency surged to a four-month high against the ‘Greenback’. The Australian Dollar also continued to derive support from this week’s Reserve Bank of Australia minutes, which showed that the central bank is not considering implementing an additional rate cut before the end of the year.

AUD/GBP is trading in the region of 0.5972, AUD/EUR is trading in the region of 0.7041 and AUD/USD is trading in the region of 0.9556

New Zealand Dollar

Since the US government went into partial shutdown over two weeks ago the ‘Kiwi’ has been trading against the ‘Greenback’ is a fairly tight range. However, the South Pacific currency was able to break free overnight and climb against its US peer as the US debt limit was raised and a disastrous default averted. An increase in New Zealand’s consumer confidence index also supported the ‘Kiwi’.

NZD/GBP is trading in the region of 0.5278, NZD/EUR is trading in the region of 0.6211 and NZD/USD is trading in the region of 0.8423

Canadian Dollar

The new plan for handling the US debt ceiling boosted the Canadian Dollar during the North American session and allowed the commodity-driven currency to close trade at a one-week high against the ‘Buck’. Tomorrow’s Canadian inflation figures are likely to inspire additional CAD/USD movement.

CAD/GBP is trading in the region of 0.6047, CAD/EUR is trading in the region of 0.7126 and CAD/USD is trading in the region of 0.9709

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.