Currency markets almost seem to expect that like most suspense movies that the ongoing debt ceiling deadline will only be resolved when there is a few seconds left on the clock.
There was some expected reactions such as the US dollar losing ground against the Yen, hitting lows of 97.99 Yen during the US session. Gold also bounced from lows of 1251.49 USD an ounce to peak at 1287.98 during the US session as the negotiations broke down again.
The other major pairs really were not that active, with the Australian dollar trading up to 95.47 US cents, whilst the Euro could only claw back 40 pips of what it had lost since Monday.
The Pound had a pronounced trading session after CPI jumped up to 2.7% which was above expectations and motivated a quick sell off surprisingly when this would add pressure to a hike in interest rate.
The Pound shed a close to a cent as it fell to 1.5915 USD following the release but ultimately the US negotiation breakdown helped it recover all losses to be back up just shy of 1.60 USD.
This morning we saw CPI data from New Zealand which saw inflation tick up to 0.9% this quarter, up from 0.2% in the previous quarter.
The Aussie lost about 30 pips versus the Kiwi as a result and the Kiwi intern briefly hit 84 US cents following the print.
We have little in the way of data out today with markets still focused on the looming deadline likely causing a dour session.
