Euro close highest level this year

Published: 4 Oct at 9 AM Tags: Euro, Dollar,

The US dollar remains pinned down because of the government shutdown in Washington. This has helped to push the euro close to its highest level this year. The single currency is trading at $1.3630 after earlier hitting a peak of $1.3646. Among the factors giving the euro support was better than expected news about Italy’s services sector which grew last month.

Conversely the services sector in the US cooled in September, something that makes uncomfortable reading ahead of possible debt default later this month. Most analysts are expecting a last minute deal to avoid a possible catastrophe. However, if it looks like a deal is not to be struck, the dollar is likely to dive.

The government shutdown has led to the US Labor Department declaring that September’s jobs report will not be released today as scheduled. The Department is yet to announce when the figures will be made public.

Any delay in positive data is likely to mean the Federal Reserve will push back plans to scale in its bond buying programme. Many analysts had expected the central bank to announce stimulus cutting measures before the end of this month. The problems in Washington could push this back to the beginning of next year.

Elsewhere the Australian dollar is up to a two-week high of $0.94036.