The US Dollar is feeling the weight of the dispute in the US Congress in a dozen or so hours before the deadline, for which funding must be fixed for public administration activities, otherwise, public employees may stay home from tomorrow. The House of Representatives approved the bill extending funding until February 16 yesterday, but there is still a vote in the Senate, where Democrats threaten to block the law. The risk of so-called “Government Shutdown” has clearly increased in recent days, but the pressure on the US Dollar is not that high as it was at the beginning of the week. As previous experience with freezing administration works shows, it does not last long and the impact on the economy is moderately negative, so investors see no reason to do more. Generally, the sentiment towards USD is negative on the market and the argument in Congress only adds arguments, but nothing more. The USD sell-off is not easy either when the US debt yields go up – the 10-year interest rate approaches 2.64 and it is worth to notice that it was not that high since 2016.
Let’s now take a look at the US Dollar Index technical picture at the H4 time frame. The market has made another lower low at the level of 90.11 but bounced quickly to the consolidation zone between the levels of 90.11 – 90.98. Nevertheless, the momentum remains below its fifty level, so another leg down should be expected.
The material has been provided by InstaForex Company – www.instaforex.com
The Government Shutdown threat still active
The US Dollar is feeling the weight of the dispute in the US Congress in a dozen or so hours before the deadline, for which funding must be fixed for public administration activities, otherwise, public employees may stay home from tomorrow. The House of Representatives approved the bill extending funding until February 16 yesterday, but there is still a vote in the Senate, where Democrats threaten to block the law. The risk of so-called “Government Shutdown” has clearly increased in recent days, but the pressure on the US Dollar is not that high as it was at the beginning of the week. As previous experience with freezing administration works shows, it does not last long and the impact on the economy is moderately negative, so investors see no reason to do more. Generally, the sentiment towards USD is negative on the market and the argument in Congress only adds arguments, but nothing more. The USD sell-off is not easy either when the US debt yields go up – the 10-year interest rate approaches 2.64 and it is worth to notice that it was not that high since 2016.
Let’s now take a look at the US Dollar Index technical picture at the H4 time frame. The market has made another lower low at the level of 90.11 but bounced quickly to the consolidation zone between the levels of 90.11 – 90.98. Nevertheless, the momentum remains below its fifty level, so another leg down should be expected.
The material has been provided by InstaForex Company – www.instaforex.com
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