US: Political risk rising - AmpGFX

Sandeep Kanihama FXStreet Contributor

According to Greg Gibbs, analyst at Amplifying Global FX Capital, markets must now factor in the risk of a period of US government shut-down that could undermine consumer and investor confidence.

Key Quotes

“The current date up to which funding is approved is 21 December. It might also raise the risk, albeit modest, that a prolonged stalemate could delay interest payments on US government securities. It might point to ongoing risks to stalemate in Congress on a range of legislation.”

“Political risk in the USA appeared to diminish in 2018 as Congress agreed on tax cuts, increased spending, and pushed out the perennial concerns over the debt ceiling. However, the debt ceiling suspension ends on 1 March 2019, the Congress is now split, and evidence suggests that stubbornness in the White House and the House of Representatives raises the risk of deadlock over funding bills and policy over the coming year.”

“This may add to economic uncertainty and asset market volatility in the US, a factor that may undermine the USD.”

“Rising political risk in the US, coming around the time that the Fed meets to decide on its rates policy on 19 December, could undermine the USD and US asset markets. It is another factor that adds to the uncertainty in the FX market. The EUR may be pressing supports today on political uncertainty in Europe, but it could quite conceivably be busting resistance in the days or weeks ahead as focus shifts to US rates and politics.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.