Get a free Quote

From CCY
please type the characters you see:
(spam filter)
spam control image

Apply now

Obligation free account and currency commentary btn_apply_for.gif
Browse By Topic

FX News

Most recent FX News:

Read more

Quick thoughts on the US Federal debt ceiling debacle!

Written by Sam Coxhead on July 26th, 2011.      0 comments

2:10 PM (NZT) President Obama and Speaker Boehner have just separately “addressed the nation” pushing two alternative plans to raise the US Federal debt ceiling. The plans are quite different, and it looks like they are not any closer to finding a resolution to this problem.
Subsequently the US dollar has again come under pressure, and it has lost ground across the board. There seems to be little chance of a rebound in the US dollar until some kind of agreement is reached. Aug 2nd has been mentioned as the cut off day, but I have read several reports that say the tax take has indeed been better than anticipated and they actually have a little more time on their side.
Earlier today we had the release of the NZ merchandise trade balance. It was not as high a surplus as expected , but still shows relatively healthy export volumes, especially in meat and dairy. The NZD saw some slight softness on the back of this number.
So the jittery market conditions look to continue until someone breaks on the negotiations. Then the focus will become on whether or not the deficit outlook has changed enough to avoid a credit downgrade. S&P have again stated they have the chances of a downgrade in the next 90 days at 50% .
Also in offshore markets the European debt spreads were wider again yesterday as the euphoria over last week’s EU summit agreement quickly wears off. Moody’s were out cutting Greece’s  and various Greek bank credit ratings and this saw the EURO under a little further pressures, of course  with the exception of against the US dollar.
    Last 24 hours trade
  Current level Low High
NZD/USD 0.8660 0.8606 0.8676
AUD/USD 1.0879 1.0791 1.0883
NZD/AUD 0.7960 0.7935 0.7996
AUD/NZD 1.2563 1.2506 1.2602
NZD/GBP 0.5310 0.5289 0.5322
NZD/EUR 0.6005 0.5992 0.6037
NZD/YEN 67.70 67.40 67.96
NZD/CAD 0.8190 0.8150 0.8240