US Leaders Agreed On Debt Ceiling Raise | IFCM UAE
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US Leaders Agreed On Debt Ceiling Raise - 1.8.2011

Safe-heaven gold fell from a record as the US President Barack Obama finally announced yesterday that US lawmakers reached a deal and agreed to raise the nation’s debt limit, as well as to decrease federal deficit by spending cuts in order to avoid a technical default tomorrow. Obama said at the White House that heads of the Democratic and Republican “parties in both chambers have reached an agreement that will reduce the deficit and avoid default.” Spot gold prices, which reached last week an all-time high at 1632.80 dollars per troy ounce on concern that sovereign-debt crises in the US and Europe may derail the global economic recovery, fell today below 1615 dollars. Stock markets also reacted positively on the latest news from the White House and Asian stocks rose sharply, with Japanese Nikkei Average index advance of almost 1.5%. US Dollar The dollar managed to strengthen somewhat against the Swiss franc and Japanese yen in Asian trading hours, after falling on Friday to a record low against the former – 0.7853 and to a four-month low against the latter – 76.89. However the greenback weakened against relatively riskier currencies, including Canadian and Australian dollar and the euro. The week is expected to be reach in important macroeconomic data. According to estimations the US failed to create enough new jobs in July to cut unemployment level. Non-farm payrolls increased by 90000 jobs after a weak 18000 surge in June that was the smallest this year, economists say before the Labor Department report on August 5. The jobless rate meanwhile remained unchanged at 9.2% after rising in each of the previous three months. Industry figures today will also show US manufacturing growth slowed last month, according to estimations, adding concerns about a relatively poor economic recovery. Pair EUR/USD traded in a narrow range this morning 1.4345-1.4403. Australian Dollar The Australian dollar climbed last week to a record high 1.1080 since 1983, when the currency went into a free float, after a government report showed second-quarter consumer prices rose more than economists estimated: the CPI accelerated to a 3.6% annual pace. Another monthly measure of inflation compiled by TD Securities and the Melbourne Institute showed today consumer prices gained 3.2% in annual figures after a 2.9% advance in June, while the central bank RBA aims to keep inflation in a 2%-3% range. Tomorrow however the Reserve Bank of Australia will release its rate decision and economists predict the central bank governor Glenn Stevens will keep the benchmark interest rate unchanged at 4.75% for an eighth meeting. Pair AUD/USD approached this morning its record high and traded at 1.0994-1.1059. Swiss Franc The franc surged to records against the euro and the dollar last week amid concerns about the European debt crisis and speculations the US policymakers might fail to achieve a deal in debt ceiling raise. The currency gained additional ground as a refuge after US data showed the world’s biggest economy grew less than forecast in the second quarter. US gross domestic product rose at a 1.3% annual rate following a 0.4% gain in the prior quarter, less than previously estimated, Commerce Department figures showed. Pair USD/CHF fell on Friday to a record low 0.7853 but traded today somewhat higher at 0.7904-0.7952. The euro also fell to a record against the Swiss currency last week 1.1298 and rose today to 1.1440.
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