Collinson FX Market Commentary- October 16, 2013 - More fiscal chess
by Collinson FX on 16 Oct 2013
Collinson FX market Commentary: October 16, 2013
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San Francisco - 18ft International - Day 3, 11 September 2013 © Richard Gladwell www.photosport.co.nz
The stalemate continues in this deadly game of chess the two political parties continue to participate in. The House put forward a plan which was vehemently rejected by the Senate leader, Reid.
He continues to work with Republican members of the Senate for a short term debt extension and a temporary re-opening of the Government. Democrats sense a capitulation and a going in for the kill with the Republicans taking the heat in the Polls.
A face saving exit would all the would need but the Democrats intend to destroy the enemy. Trapped their is little choice but capitulation would be political suicide. Markets remain calm with equities giving up the previous days gains and currencies remaining steady.
The EUR traded 1.3515 and the GBP 1.5980 with no official US official data.
The AUD surged above 0.9500 yesterday after positive news from the US and held overnight despite the uncertainty. The NZD has also booked gains with attractive alternative investment prospects for investors disappointed in the USD.
The KIWI traded above 0.8350 but could be vulnerable with a failure in US negotiations. Still all about Washington!
Collinson FX market Commentary: October 15, 2013
Expectations are rising in Washington, that a deal to avoid the debt default, is likely to be done. The Senate leaders have been negotiating, as have a bi-partisan group of Senators, which is likely to result in some sort of solution which will be sent to the Republican House.
All Congressional leaders are scheduled to meet with Obama and Biden at the white house to address the situation. Biden is a known negotiator and may have an influence on his intransigent boss. The prospect of a deal turned equity markets positive after early losses.
There is no major data releases in the US as it is Columbus Day holiday and the Government remains closed for business.
The EUR rose back to 1.3560 and the GBP approached the significant 1.6000 level. Commodities also recovered, boosting associated currencies, with the AUD rising to 0.9460 and the KIWI surging back towards 0.8350. Focus remains Washington.
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