Debt ceiling debate sends USD higher, Shanghai Composite lower as China coal crisis worsens [Video]

U.S. debt ceiling debate sends Dollar higher

The Dollar continued to strengthen on Wednesday, despite debates in Washington raging on, in regards to the country’s debt ceiling.

Tensions grew with the deadline to suspend or extend the ceiling coming on Thursday, with many believing a stalemate could lead to a government shutdown.

News of this comes as markets gear up for the Federal Reserve beginning to taper its asset purchasing program, with a rate hike also expected next year.

GBPUSD continued to fall in today’s session, hitting an intraday low of 1.3411, which is its lowest rate since December 2020. 

EURUSD was also lower, falling to its weakest level this year, trading below 1.16.

Shanghai Composite lower as China coal crisis worsens

In China, the Shanghai Composite traded lower on Wednesday as the country’s coal crisis continued to impact investor confidence.

Supply of coal within the world's second largest economy slowed in recent weeks, as the country heads into winter, with the country’s electricity council stating that it will pay, “any price to ensure heating and power generation in winter”.

There have been numerous bottlenecks in the supply of coal and other energies in recent months, leading to prices of these commodities trading at multi-year highs.

In Europe, the price of coal has risen to a 13-year high, with Australian coal surging by as much as 250% within the last year.

The Shanghai Composite closed 1.83% lower on the news.