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No Default in USA, EUR/USD Surges

October 17, 2013 by

The dollar slumped against all other most-traded currencies as US politicians managed to reach a deal for raising the debt ceiling. It is not an end to the story as negotiations will resume in January, but at least a catastrophe was averted for now. Government agencies reopen and the flow of official economic data should soon be resumed, but for now there are not many reports from the United States. The greenback also fell as the Chinese rating agency Dagong cut the US credit rating, while Fitch Rating put the US credit grade on a negative watch.

Initial jobless claims fell from 373k to 358k last week, matching forecasts. (Event A on the chart.)

Philadelphia Fed manufacturing edged down from 22.3 in September to 19.8 in October. The median forecast promised a bigger drop to 15.4. (Event B on the chart.)

On Tuesday, a report on NY Empire State Index was released, showing a drop from 6.5 in September to 1.5 in October instead of expected increase to 8.2. (Not shown on the chart.)

EUR/USD for 2013-10-17

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