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2 Oct 2013
Why such muted reaction to US shutdown and what it means for AUD/USD?
FXstreet.com (Barcelona) - While some may have felt a slight disappointment to see the muted currencies reaction to the US government shutdown, the reality - now in hindsight - seems to suggest that markets were prepared for it.
According to Bradley Gilbert, CTA, Founder at Traders4Traders: "If you break it down you can see why it had no major impact. It’s a partial shutdown, despite the headlines on every major news network." Gilbert adds that "with the upcoming US debt ceiling debate due on October 17th, this event pales into insignificance." He concludes is business as usual for the currencies.
RBA stays neutral
One transcendental development which transpired yesterday though, is the reassurance that the RBA remains quite comfortable retaining its 'neutral' tone on monetary policies for now, judging Tuesday's 2.5% rate hold as 'the appropriate' decision to make, adding “the full effects of these decisions are still coming through, and will be for a while yet.”
AUD/USD headed towards parity?
In view of Gilbert, "Further USD issues may see the AUDUSD rally back towards 1.0000, so keep an eye on the major headlines as we approach October 17th." Failure to extend the US debt ceiling, according to Gilbert, "may see a further downgrade of the US dollar and this should be the catalyst for a ‘much’ higher AUDUSD."
According to Bradley Gilbert, CTA, Founder at Traders4Traders: "If you break it down you can see why it had no major impact. It’s a partial shutdown, despite the headlines on every major news network." Gilbert adds that "with the upcoming US debt ceiling debate due on October 17th, this event pales into insignificance." He concludes is business as usual for the currencies.
RBA stays neutral
One transcendental development which transpired yesterday though, is the reassurance that the RBA remains quite comfortable retaining its 'neutral' tone on monetary policies for now, judging Tuesday's 2.5% rate hold as 'the appropriate' decision to make, adding “the full effects of these decisions are still coming through, and will be for a while yet.”
AUD/USD headed towards parity?
In view of Gilbert, "Further USD issues may see the AUDUSD rally back towards 1.0000, so keep an eye on the major headlines as we approach October 17th." Failure to extend the US debt ceiling, according to Gilbert, "may see a further downgrade of the US dollar and this should be the catalyst for a ‘much’ higher AUDUSD."