EUR/usd
It seems that in contrast with the preceding two times the American legislators won't come to an agreement in the last minute. This is sad. The farce is getting to a new level. But now it appears that Americans will be participants rather than spectators as all this will entail unpaid holidays for about a million of civil servants, closing of national parks and some agencies, and also automatic spending cuts in some spheres. When the markets realized that, traders tried to put the dollar under pressure and, as a result, eurusd again made an attempt to rise above 1.3550. Just like on Friday the euro was too weak to consolidate there as there were lots of those willing to get rid of the euro at such levels. This way or another, bulls managed to close the gap on Monday's market opening. Afterwards the pair started sliding down and reached the levels of the end of the last week. All this shows that the markets react to the changes in the situation, but mainly speculatively. There are no serious stakes in any direction. The stock markets, which sagged in the beginning, have recouped some part of the losses. It is quite surprising for those who thought that the current situation would arouse strong turbulence, resembling what happened in 2011 or at the beginning of this year. We believe that the current state of affairs carries risks of a sudden drop of the dollar, but this decline is unlikely to be long-term. The euro and other currencies don't have any inner strength for growth and the previous rally should deprive bulls of their energy. So, probably, we'll see another attempt to get above 1.3550 and, perhaps, the pair will be pushed as far as 1.3600.
GBP/USD
The sterling has again hit a fresh nine-month high. Yesterday during the day the pair went as high as 1.6200. However, at the end of the Asian session it jumped even higher – to 1.6240. The bulls seem to be unwilling to retrace until they get above the current yearly high (1.6340). Today's release of Manufacturing PMI can be a great help here, if the index manages to break above last month's rate, which indicated the strongest activity for two years and a half.
USD/JPY
Against our expectations, yesterday the yen once again fell below the weekly open. But afterwards it was actively going up on the news from the USA. The news about growth of Tankan can be considered positive for the pair. The pressure of yen-sellers was stopped by the news on consumer spending, which shrank by 1.6% annually in August.
EUR/CHF
The pair managed to find its buyers, going up from 1.2200, which also helped the single currency to grow against the dollar. Probably, but for support of bulls (and perhaps of the SNB) the euro would have felt much worse. Being so close to the “bottom” of 1.20 against the euro, the franc will hardly behave as a safe haven.
