Debt dispute continues to simmer. The US Dollar could come under pressure, economists at Commerzbank report.

No solution in the US debt dispute

“As expected, the summit about raising the US debt ceiling did not result in an agreement. The FX market does not show any signs of nervousness in view of the approaching debt deadline.”

“The longer it takes to find a resolution for the debt dispute, the more the sentiment in the US is likely to be affected by the suspense. As that would point more towards a further cooling of the economic momentum this is likely to support the expectation of imminent Fed rate cuts from the market’s point of view, thus principally putting pressure on the Dollar.”