Market News 08 October 2013

Concerns about the US government shutdown and the debt ceiling negotiations are mounting. EUR/USD didn’t reach $1.3600 yesterday and slid to $1.3560 today. Watch for German factory orders at 10:00 GMT (forecast: 1.2%; previous; -2.7%). In US the speeches of the Fed’s Pianalto and Plosser will be in the limelight. GBP/USD is trading on the downside at $1.6070. Pound’s consolidating after the yesterday’s mini-rally gains of around 85 pips on the news that optimism in the UK’s financial industry improved in Q3.

USD/JPY tested levels below 200-day MA at 96.60 as US President Barack Obama reiterated he won’t negotiate with Republicans over the borrowing limit, but then recovered above 97.00 as investors still believe that the United States will manage find a solution in the end. Yen fell as Asian stocks snapped a 2-day decline, damping demand for safer assets. Japanese current account surplus turned out to be lower than expected. USD/CHF rose a bit to 0.9050. Switzerland will release inflation and retail sales data today at 07:15 GMT, while the SNB President Jordan will speak at 16:00 GMT.

AUD/USD has once again tested $0.9450, but then returned 20 pips lower. Aussie’s supported by the solid Australian data, but capped by risk-off sentiment created by American problems. NZD/USD keeps consolidating around $0.8400. USD/CAD is pushing higher towards resistance in the 1.0340 area. Canada will release trade balance at 12:30 GMT. Building permits disappointed yesterday.