The euro was increasing in value against the US dollar today, trading at 1.4505 as of around 8:00 A.M., GMT.
The EU’s single currency is up 0.897% on the day and has reached a session high of 1.4522 with a low of 1.4358 so far.
Earlier today, the dollar hit a record low against the Swiss franc and a four-month trough versus the yen.
The dollar continues to be weakened by the impasse in the ongoing negotiations to solve the US debt crisis. Democrats and Republicans have thus far failed to reach an agreement to raise the debt ceiling a few days before the August 2nd deadline.
Despite President Barack Obama’s speech from the White House yesterday, investors are still very skeptical about the possibility of resolving the US debt ceiling issue soon. In his speech, Obama said that the Republicans’ attitude had led to a “dangerous” impasse.
“Obama’s speech disappointed market expectations of progress hoping to break the deadlock” on the US debt ceiling issue, said Hideki Hayashi, an economist at Mizuho Securities.
The dollar “was weighed down by uncertainty about the outcome of negotiations and fears of a possible deterioration in the US credit rating,” said Gen Kawabe, analyst at Chuo Mitsui Trust and Banking.
If markets do not really believe that the US can be found in default, the endless bipartisan discussions makes them fear a deterioration in the rating of the long-term debt of the country.
Rating agencies have already threatened to lower US credit ratings as they now have the best possible rating, “AAA.”
Later today, around 3:00 P.M. GMT, the Census Bureau is to release the US New Home Sales figures.