U.S. Dollar Climbs As Debt Deal Rumors Swirl

CHICAGO (Oct 15)  A better reality TV script has not been written so in that sense, things couldn’t get any better: we are tantalizingly close, or so capital markets are being led to believe, to witnessing the end of the U.S. fiscal standoff. It is within the Senate’s grasp to save the day we’re told, and if so, they now must race to sell the plan to lawmakers before the U.S. Treasury’s borrowing authority runs out on October 17 – the supposed deadline. An emerging deal between the Republicans and Democrats would stave off a potential default, end the two-week-old U.S. partial government shutdown, and in doing so, trade immediate deadlines in favor of three new, elongated ones. “Can-kicking” never looked so good.

Hollywood could not write a grander finale. So far, U.S. politicking has managed to bring global financial markets to a near standstill. The lack of urgency from investors has born little pressure on American lawmakers to hasten their decision process. President Barack Obama and company have been tongue-lashed from various Group of 10 members and international agencies, reminding the U.S. that its inaction is pushing the global economy toward another recession. Until a decision is reached, asset classes remain paralyzed by global inactivity, a lack of liquidity, and “cheap” position taking.