Esther Reichelt, FX Analyst at Commerzbank, has not seen a situation where EUR/USD has clearly reacted to a news flow about the debt crisis.

What is driving the Dollar?

“I find it impossible to say whether and in what form the US debt crisis is priced into the EUR/USD exchange rate.”

“The absolute calm in the options market suggests to me that it is monetary policy considerations rather than the ongoing US debt ceiling negotiations that are driving EUR/USD.”

“If the recent USD strength is primarily due to the upward revision of interest rate expectations, it also means that the USD rally is likely to end soon. Otherwise, one would have to assume that the Fed could raise rates much further than currently expected. And not even the hawkish FOMC members are signaling that at the moment.”