03, October 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

The dollar weakened yesterday due to the fact that the U.S. government may suspend its work, as the lawmakers have not reached agreement on the budget for the new fiscal year.

The dollar fell to 7-month low against the euro and British pound, but it brought back some of lost positions by the end of the day. The dollar's decline was limited, and most market participants expect that Congress will eventually reach an agreement on fiscal policy.

The production data in the eurozone and the UK showed an increase in activity in September, although it was at a slower rate than in August.

The U.S. debt ceiling disputes are still in the process, causing concern among investors. It is expected that funds from the U.S. Treasury Department will end by October 17, if Congress does not reach an agreement, the government can continue to borrow.

There is no doubt that as long as the uncertainty surrounding the debt and quantitative easing in the United States continues, the U.S. dollar will remain under pressure.

The unemployment rate in the euro zone fell in August for the third month in a row, which is another sign of continued moderate economic recovery. This was mentioned by the EU statistics agency data from Eurostat, released on Tuesday. However, a slight decrease in the number of unemployed in August to 19,178,000 from 19,183,000 in July, it was not sufficient to affect the unemployment rate, which was 12% in August.