The US Government has finally sealed a deal that delays the debt ceiling and government shutdown till early next year.
Equity markets did rally in the States with the S&P500 up 1.38% but it didn’t translate into across the board gains for the Greenback. The US dollar did have strong gains against the Yen coming very close to touching 99 Yen but if anything the deal helped high yielding currencies such as the Australia dollar which broke through a June 19th high as it peak at 95.68 US cents as the Senate vote passed. The Gold price however was largely unaffected with the news seeing it remain at the top of this week’s range currently at 1282.03 USD an ounce.
The Euro and Pound had the most pronounced losses which began in the European session. The Pound dropped from 1.6055 USD down to a low of 1.5894 USD but has recovered to be only 1 cent down from yesterday’s high. The Euro however only dropped 90 pips through the European session but has recovered stronger to be 30 pips down from yesterday, illustrating how much more volatile Pound trading has been in the last 4 months.
Our local session should be buoyed from a translation of equity strength from the States to here which should help under AUD strength. Our only data source will be NAB Quarterly Business Confidence which is unlikely to have any noticeably effect. Retail sales from the UK will add to what has been a choppy last month of data, with a 0.5% bounce expected in the early evening.
Joel Murphy
www.pepperstone.com Joel Murphy is a currency analyst and market commentator for Forex Broker Pepperstone and he regularly features on Sky Business News Australia. He has worked in both retail and institutional Forex for last 8 years and completed a Bachelor of Commerce and a Bachelor of Arts from Monash University
