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GBP & Euro to Exhaust – Gold to Wobble – Oct 01

October 1, 2013
US Dollar came under renewed pressure, stocks are suffering, but gold that normally enjoys safe haven status did not benefit from shutdown tension. Senate has rejected the bill, which means shutdown officially begins at 3 GMT. It is expected that the default limit will be hit on October 17 if Congress fails to reach an agreement during this period. Though history suggest that USA has never defaulted on its debt.
Meanwhile, market volume is thin and trading activity is dull due to lack of direction. Italian uncertainty and weak German retail data was ignored by market waiting for US shutdown outcome. The situation in Europe is brittle and hence, further economic or political bad news could clobber European market. Euro surely looks vulnerable on the downside due to quite a few unfavourable factors..
Two major announcement will come from Japan and Australia. But Japanese news flash will be keenly watched, as market will be waiting to hear Japan’s stimulus package, which is expected to provide relief to corporate sector. Australian Central Bank will take decision on interest rate, which is likely to hold, but its stance will probably remain soft.

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