Investors are hopeful that, as the deadline for a U.S. debt default draws nearer, the two political forces will have been able to work together and cobble together some deal which will avert the crisis. Thus far, progress has been nil with the latest head to head meeting held yesterday between the Republican leadership and the U.S. president resulting in no change to the status quo. However, there was still some hope in that talks were expected to be held throughout the night in the hopes that the U.S. government would soon be working again.
As reported at 12:50 p.m. (JST) in Tokyo, the USD/JPY pair traded at 98.49 Japanese Yen, just a few pips from the session peak struck earlier on the EBS; the peak of 98.56 Yen was the highest price hit in nearly a week, and moving well away from Tuesday’s 2-month trough of 96.55 Japanese Yen. The U.S. Dollar Index, the measure by which investors judge the greenback’s relative value, ticked higher to 80.448 .DXY, but still off yesterday’s peak of 80.595 .DXY. The EUR/USD pair edged up to $1.3538.
Strategists Confident but Advise Caution
With the October 17th deadline less than a week away, currency strategists are cautioning their investors that they believe the debt issue will be dealt with prior to then, as all parties clearly recognize the major repercussions that could result if the U.S. does default on the upcoming debt payments.