FX EUR/USD – Market Review

Yesterday President Barack Obama met with Republican and Democratic leaders in Congress and tried to break a deadlock that has shut down wide swaths of the federal government. It doesn’t look like a compromise is on the cards any time soon and while the stalemate continued hundreds of thousands of federal employees faced a second day without pay. The Dow Jones Index fell 0.4 per cent and the Standard & Poor’s index declined by 0.1 per cent.

Yesterday European Central Bank President Mario Draghi said he’s ready to take any necessary measures to keep money-market rates in check as he tries to steer Europe’s banks through the early stages of an economic recovery. The ECB’s Governing Council kept the main refinancing rate at a record low of 0.5 per cent for a fifth month in a row. The ECB pumped more than 1 trillion euros of three year loans into the financial system during the debt crisis. The health of the euro region’s economy has shown signs of improvement since last month’s ECB meeting and economic confidence rose for a fifth month. Other welcome news were that factory output expanded for a third consecutive month. As a result the EUR appreciated to 1.3607 versus the USD and the EUR/JPY was at 132.20. The USD declined 0.7 per cent to 97.36