US dollar traded with stability against the majority of its 16 main rivals during late US session on Friday, as US lawmakers were approaching an agreement regarding the budget crisis, which caused the partial government shutdown in the country on October 1st and shook financial markets.
EUR/USD closed at 1.3540, gaining 0.14% for the day, after trading as high as 1.3582 at 10:00 GMT.
GBP/USD cross closed at 1.5946, losing 0.13%, after reaching a session high at 1.6002 at 8:00 GMT.
USD/JPY closed at 98.56, marking a 0.40% daily gain, minutes after hitting its highest point on Friday at 98.60.
USD/CHF closed at 0.9122, ticking up a mere 0.04% for the day, after reaching a session high at 0.9132 at 16:35 GMT.
USD/CAD closed at 1.0358, falling 0.38% for the day, after recording a session low at 1.0340 at 18:30 GMT.
AUD/USD closed at 0.9466, rising 0.13% on a daily basis, after hitting its highest point at 0.9485 at 10:15 GMT.
NZD/USD closed at 0.8322, climbing 0.47% for the trading day, after trading as high as 0.8354 at 11:45 GMT.
The budget debate between US President Barack Obama and Republican leaders, who control the House of Representatives has idled hundreds of thousands of government workers and has led to an already 12-day government shutdown, while the country was put at risk of a historic debt default, unless the debt ceiling is lifted. Barack Obama and his Republican opponents are trying to reach an agreement on how long to extend the debt limit, with Republicans proposing to confine the extension to six weeks and also trying to force more concessions out of the president.
Obamas debates with House Republicans on Thursday and Senate Republicans on Friday were seen as a sign of progress, but yet, there were still many details to be discussed before a deal is made. North Dakota Republican Senator John Hoeven said that there were enough ideas being discussed to get to an agreement, but the thing of greatest importance was finding the right combination of these ideas, that can pass both the House and Democratic-controlled Senate, Reuters reported. “I want to see the government get opened and I want to see a debt-ceiling solution. But weve got to use this time as well to find some savings and reforms, and we are talking about what savings and reforms we can get people to agree to”, Hoeven said, cited by the same media.
Meanwhile, the budget negotiations in the United States completely dominated market sentiment on Friday, with few vital economic data points released during the early European session. The most keenly anticipated indicators on the day were scheduled for release during late European and early US trade. Among the string of data out of the United States, the consumer confidence index was the only indicator actually reported. The report on US retail sales has not been released for a second week in a row, because of the government shutdown.
The preliminary value of the index, gauging consumer confidence in the United States, evaluated by the University of Michigan in cooperation with Thomson Reuters, decreased to 75.2 in October, marking its lowest point since January this year. During late September the final value of this indicator stood at 77.5. Experts had expected that the confidence gauge will remain almost without change. This result occurred amid the partial government shutdown in the United States and as the deadline for a possible debt-limit raise drew near. According to the US Treasury, the nation is expected to lose authority to pay its debt obligations on October 17th. On the other hand, increased stock market volatility also contributed the slide of the consumer confidence index. All in all, this indicator is closely watched by experts, as it provides crucial signals regarding the development of consumer spending in the country, while consumer expenditures are a major driving force behind economic growth.
At the same time, in Canada, a report by the national statistical agency showed that the rate of unemployment in the country fell for a second consecutive month in September to reach 6.9% from 7.1% in August, while experts had anticipated that the rate will remain unchanged. This was the lowest unemployment rate since December 2008. At the same time, the number of employed people increased by 11 900 in September, slowing down compared to 59 200 people, who started work in August. Preliminary estimates pointed that Canadian economy will add 10 000 new job positions in September.
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