US: Increasing political uncertainty could cast a shadow over the USD's near-term outlook – Crédit Agricole
|Economists at Crédit Agricole highlight uncertainties surrounding a potential US government shutdown and its implications for the USD.
Some relief and support to the USD if a resolution to prevent the shutdown is reached before the deadline
The expectation is that a resolution will be reached before the 1 October deadline, possibly by pushing the spending bill to early December. Post this deadline, non-essential federal agencies will cease their operations. However, increasing uncertainty is being introduced by the Freedom Caucus, who have indicated that they might vote against any interim solutions.
If a resolution to prevent the shutdown is reached before the deadline, it could potentially offer some relief and support to the USD. On the other hand, the increasing political uncertainty brought on by parties like the Freedom Caucus could cast a shadow over the USD's near-term outlook. If market participants believe that a shutdown is becoming more likely or if the situation turns more contentious, we could see heightened volatility and possibly a weaker USD in the short term.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.