Stock Market Watch

Forex Market Update: Dollar Index Drops Further

by ·


The U.S. dollar traded broadly lower on Wednesday as lack of progress over the budget talks stoked concerns that the shutdown of federal agencies could continue for a longer period of time and lack of consensus over the debt-ceiling issue could potentially throw the U.S. economy in to doldrums.

The dollar Index, a measure on U.S. unit’s performance against a basket of six major traded currencies, fell 0.32% to 79.93.

The WSJ$ Index, whose currency basket is slightly broader, was down 0.34% to 72.33.

The first shutdown of federal agencies since 1996 came in to effect from the midnight of October 1. To every one’s surprise, stocks traded sharply higher on the first trading day of a new quarter on Tuesday. Market Participants probably believed that the shutdown would not last too long; however, the anxiety resurfaced again on Wednesday with global equities coming under pressure.

The lawmakers have about two weeks now to resolve the debt ceiling issue before the mid-October deadline. In case, the stalemate continues then the impact of shutdown could badly start hurting the U.S. economy. Already, almost 800,000 federal employees have been left on an unpaid leave.

“We do fear that as this discussion drags on, volatility in the market will continue to increase,” said Patrick Moonen, senior equity strategist at ING Investment Management, according to Reuters.

The European Central Bank (ECB) has left the benchmark interest rate unchanged at 0.5%, which was in-line with expectations.

The euro was last up 0.45% against the dollar to trade at $1.3587.

 








More Posts by this author

edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.

Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

You may also like...