The Japanese yen rallied as fear of a potential default in the United States made Forex traders to flock to safer currencies. There were hopes that US politicians will reach a compromise soon, but now it looks like nobody is willing to give up first and the standoff continues.
Republican House speaker John Boehner said that the House will not approve raising debt ceiling unless the Obamacare will be delayed. President Barack Obama refused such demands, saying:
Weâre not going to negotiate under the threat of economic catastrophe.
The United States risk a technical default if politicians are not able to find a consensus and raise the debt ceiling by October 17.
Not many believe that the situation will get out of control and end in a real catastrophe. Yet nobody is willing to risk and investors prefer to stick to safer currencies.
USD/JPY fell from 97.18 to 98.68 yesterday before trading at 96.71 as of 00:39 GMT today. EUR/JPY slid from 131.84 to 131.31 on the previous trading session and traded near this level on the current session. GBP/JPY was almost flat at 155.65.
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