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Posted October 1st, 2013 by Charles Purdy

US government shut down undermines the US dollar

The US dollar was rocked yesterday as the possible partial government shutdown became a reality causing the currency to fall against most of its major partners. Overnight, the US government partially shut down for the first time in 17 years because a deal could not be struck on the budget, as a result, as many as 800,000 federal employees will be sent home without pay as the US edges ever closer to running out of money. A temporary budget needs to be passed to help fund the gap between now and October 17th when the debt ceiling must be raised so that the government can borrow more money, otherwise the US will run out of money and in turn will default on its debt. With the US government partially shut down, growth for the country will be damaged (some estimates suggest to the tune of $300 million a day) and in turn, means it is less likely that the Federal Reserve will commence tapering its quantitative easing program this month. Encouraging data in the form of better than expected Chicago purchasing managers index helped to give the dollar a little bit of buoyancy in the day, but was overshadowed by the bigger events. Today, manufacturing PMI figures is the most influential economic indicator due for release, while positive results from other smaller areas could join together to give a little more strength to the currency. Call in now to see how the US dollar continues to react following last night’s revelations.

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Posted September 11th, 2013 by Charles Purdy

US dollar weakens as likelihood of armed intervention in Syria recedes

With economic data thin on the ground for the US dollar yesterday, the Syria situation remained the main influence on the strength of the currency. The latest development within this centred around a Russian-backed plan to surrender Syria’s weapons, and avoid the need for US military intervention. As a result, the USD dollar weakened against the majority of its major partners as it reduced investors demand for the currency as a safe haven. Any further news regarding this is likely to again be the main driving force behind the US dollar rates today, with no significant data scheduled to be released from across the pond today. Further positive results from China’s economy also damaged the US dollars strength, as strong data from the worlds second largest economy provides further evidence that the global economy as a whole is recovering. Investors will have to wait until tomorrow for key data releases, but in the meantime investors will keep a keen eye on the Syria situation. Get in touch with your trader now for an up to the minute price on the US dollar, as external influences dominate its performance.

Posted August 5th, 2013 by Charles Purdy

Poor employment data undermine the US dollar

Friday rounded off a volatile week for the US dollar, with another day of big movement. Early in the day the US dollar enjoyed slight gains following data released on Thursday showing a fall in jobless claims, before seeing these gains wiped out as it plummeted, losing ground quickly over the day against most of its major trading partners. This trend was set after the non-farm payrolls data came our much lower than expected, detailing growth of 162’000 in July versus forecasts of 185’000 – the lowest number since March. Moreover, last moths figures were also revised lower. As such, expectations that the Federal Reserve would start tapering by starting any time soon were lowered, as they have stated this would only be considered if significant improvements were seen in the labour market, and as such will want to see more sustainable growth in this area before implementing this. Important data due this week for the US dollar includes non-manufacturing PMI, the trade balance, and further unemployment data in the shape of the weekly unemployment claims figures, all of which could see a reaction from the US dollar rates. Call your trader today for the latest price on the Dollar.

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