Daily Afternoon Report - Tuesday- 15/10/2013

[jonesryan992]

The dollar was broadly higher against the other major currencies on Tuesday, amid optimism that a deal to reopen the U.S. government and raise the government borrowing limit is close. The dollar found support after Senate Majority Leader Harry Reid said Monday that “tremendous progress” had been made towards a deal to raise the U.S. debt ceiling and reopen the federal

government, fuelling hopes that a compromise can be reached. If an agreement to raise the government borrowing limit is not struck ahead of Thursday’s deadline, the U.S. will face an unprecedented sovereign debt default. However, any potential deal will still have to be approved by the House of Representatives, where Speaker John Boehner would have to decide whether to allow a vote or demand federal spending cuts. The single currency shrugged off data showing that German economic sentiment improved more-than-expected in October, rising to the highest level since April 2010. The ZEW Centre for Economic Research said that its index of German economic sentiment rose by 3.2 points to hit 52.8 in October from September’s reading of 49.6. Analysts had expected an unchanged reading.

The dollar was also higher against the pound. Data released on Tuesday showed that consumer price inflation in the U.K. accelerated 2.7% on a year-over-year basis last month, unchanged from August. Analysts had expected consumer price inflation to tick down to 2.6%.

The Australian dollar strengthened after minutes from the Reserve Bank of Australia's October meeting indicated that the bank is in no hurry to cut interest rates further, saying that previous rate cuts are still affecting the nation's economy

By TradingFOREX.com