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Collinson FX Market Commentary- October 8, 2013 - Debt ceiling looms

by Collinson FX on 9 Oct 2013
Stoke (NZL) - 18ft International - Day 3, 11 September 2013 © Richard Gladwell www.richardgladwell.com

Collinson FX market Commentary: October 8, 2013

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The US Government partial shutdown and the looming debt ceiling expiry continued to dominate market direction.

An impasse has grown between the Republican House and the Democratic Presidency and Senate. The Republicans have been forced into a corner and do not want to capitulate and the Democrats want to force their position of strength. The problem only becomes more serious when the Debt Limit is reached mid October. It is hard to see a compromise without a capitulation and the Tories appear the more likely. The disruption to markets come with the uncertainty and this has been hitting equities hard in a month renown for major equity adjustments.

The USD was steady with the EUR trading 1.3575 and the GBP 1.6085. Commodities were mixed and the AUD traded 0.9435 while much of the Country was closed for Labour Day. The KIWI also experienced light trading and held near 0.8300. Watch US and European bonds for signals of danger during these political negotiations as this will reflect the danger levels in the markets.

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