Forex Flash: Dollar down as House fails to vote on budget proposal – Well Fargo (Barcelona) - Nick Bennenbroek, Head of Currency Strategy at Wells Fargo notes that the U.S. dollar and yen are firmer, and global equity markets are lower, with the failure of the House to vote on a budget proposal contributing to caution across financial markets.

House Speaker Boehner cancelled the vote that would have taken place Thursday evening, acknowledging that the proposal did not have sufficient support to pass, and any vote by either the House or the Senate now won’t take place until after Christmas. Bennenbroek feels that the inability of the House to pass this particular measure has injected some new uncertainty into the budget talks, in terms of how negotiations between Republicans and the White House will proceed from here, and on whether Mr. Boehner will be able to muster enough support in the House should U.S. political leaders come to a deal.

He writes, “While the latest developments have not scuttled the possibility of a broader budget agreement being reached, the timing is now very tight and the margin for error even slimmer. The ‘safe-haven’ strength in the Greenback and yen, and weakness in most foreign currencies, is understandable given the last events – indeed the reaction so far is arguably somewhat modest. Further U.S. dollar strength and foreign currency weakness is possible with the uncertain backdrop likely to persist for at least the next few days.”