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EUR/USD Update – Government Shutdown Begins as Deadlocked Congress Flails



Good day forex traders and readers.

As the shutdown of the US government began, the EUR/USD unexpectedly remains largely flat. Nonetheless we are seeing some US dollar weakness across the markets as sovereign issues are always frown upon by investors. An interesting observation is also that the gold price has dipped.

Read more below on the US government shutdown crisis :

Government Shutdown Begins as Congress Divides on Spending

The U.S. government began its first partial shutdown in 17 years, idling as many as 800,000 federal employees, closing national parks and halting some services after Congress failed to break a partisan deadlock by a midnight deadline.

Congressional leaders have scheduled no further negotiations on spending legislation, raising concerns among some lawmakers that the shutdown could bleed into the more consequential fight over how to raise the U.S. debt limit to avoid a first-ever default after Oct. 17.

Many federal employees reporting to work today will be given a few hours to conduct shutdown activities, such as securing files and posting closed signs and phone messages, before being sent home until Congress passes a spending measure for the new fiscal year, which began today. One government operation that will continue is the start of enrollment in the health-insurance exchanges mandated under President Barack Obama ’s Affordable Care Act, the plan opposed by many Republicans.

Markets took the government shutdown in stride. Global stocks rose after the biggest decline in a month and Treasuries fell on speculation any economic effect from it will be limited. The dollar weakened. The Bloomberg U.S. Dollar Index dropped 0.2 percent, crude fluctuated and corporate bond risk fell for the first time in five days. Public Opposition

Still, the shutdown will be broadly unpopular with the public, according to a national poll released today by Quinnipiac University. By 72 percent to 22 percent, Americans oppose Congress “shutting down major activities of the federal government” as a way to stop the health-care law, known as Obamacare, from going into effect, the national survey found.

The poll, conducted Sept. 23-29, showed voters disapprove of the job being done by congressional Republicans 74 percent-17 percent — their lowest score ever — while disapproving of Democrats’ job 60 […]

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