US Government Shutdown Looms Over Funding for Trump’s Mexican Wall

US President Donald Trump’s threats to shut down the government in October, over the building of the Mexico border wall funding, sparked concern in financial markets, and could now complicate Congress’s job of raising the debt ceiling. US Congress needs to pass a spending measure to keep the government open by Sept 30th, at the same time, US congress is facing a deadline to raise the nation’s debt limit.

President Trump’s government shutdown raises the spectre of a potentially market-shaking event, with the US dollar and US stock market likely to come under fire, if President Trump does ultimately decide to shutdown government. House Speaker Paul Ryan said Congress will likely need a short-term stopgap bill since it needs more time to complete the appropriations this fall. Now, the president has suggested he would veto a spending bill that doesn’t fund the wall. President Trump has requested 1.6 billion US dollars for the construction of Mexican wall, which Democrats have widely rejected. While the House has passed a package of spending bills that contain wall funding, such a measure has yet to find the support of the 60 senators needed to pass it bill Senate.

New US home sales unexpectedly fell in July, dropping to their lowest level in seven months, raising concerns of a slowdown in the American housing market. Statistics showed new home sales tumbled 9.4%, to a seasonally adjusted annual rate of 571,000 units last month, which marked the lowest level since December 2016. The percentage drop was the largest since August 2016 and was far below expectations of a 0.3% gain, however June’s sales pace was revised up to 630,000 units from the previously reported 610,000 units.

Investors were left disappointed, as the key note speeches from Federal Reserve Chairwoman Janet Yellen, and ECB President Mario Draghi at the Jackson Hole symposium offered no new clues about the path future monetary policy. Janet Yellen stuck to script, and delivered a speech on financial regulation, the lack of any new update on the U.S economy caused the US dollar index to weaken across the board.

ECB President Mario Draghi spoke on the topic of the global recovery, with few surprises offered in his prepared speech. Draghi however, unintentionally caused the EURUSD and EURGBP pairs to reach new 2017 trading high’s, as traders bought the euro, when the ECB head failed to address the recent strength in the single currency.

Indonesia’s central bank made a surprise 25 basis point rate cut to interest rates Tuesday as Southeast Asia’s largest economy seeks to boost growth. Bank Indonesia’s board of governors unexpectedly cut the rate from 4.75% to 4.5%, going against the predictions of most analysts polled before the announcement. Indonesian policy makers said by cutting the nations interest rate they are aiming to stabilize the financial system and support higher economic growth.

The euro spiked to a 10-month high against the British pound, as the German and French PMI data continued to show strong economic growth during August. The EURGBP currency pair moved steadily above the 0.7200 handle, as France posted a robust 55.8 reading, with the German economy also beating the previous months figure and consensus forecasts, with a 59.4 reading.

The New Zealand dollar fell to a two-month low against the US dollar, after the pre-election fiscal forecasts unexpectedly warned of weaker economic growth ahead, and smaller budget surpluses. The NZD declined to $71.95 cents against a greenback, a level not seen since mid-June this year. The forecasts showed a bigger surplus for the 2017 financial year, and scaled back projections for economic growth from the May update, with the NZ Treasury predicting that gross domestic product grew 2.8% in June on an annualized basis – a slower pace than expected.

Next week, financial markets will look to the US Nonfarm payrolls job report, as the main market moving event. The consensus forecast is for the US economy to create 185,000 jobs in August, slightly down from the July figure, of 209,000. The Eurozone releases key CPI data for the month of August, and the official unemployment rate. The Canadian economy also releases second quarter GDP data figures. We also see August manufacturing data from the Chinese economy, and industrial production figures from Japan, and ISM manufacturing figures from the United States.

https://www.washingtonpost.com/powerpost/trumps-shutdown-threat-raises-stakes-for-lawmakers-in-looming-funding-battle/2017/08/23https://www.reuters.com/article/us-usa-economy-housing-idUSKCN1B31ODhttps://www.reuters.com/article/us-usa-economy-unemployment-idUSKCN1B41HShttps://onedrive.live.com/edit.aspx?cid=abf334bae1c13843&id=documents&resid=ABF334BAE1C13843!1539&app=Word&&wdPid=8235a4ahttps://www.ft.com/content/f579e648-87e1-11e7-8bb1-5ba57d47eff7http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11909878https://www.investing.com/economic-calendar/

The post US Government Shutdown Looms Over Funding for Trump’s Mexican Wall appeared first on Forex.Info.

Source:: US Government Shutdown Looms Over Funding for Trump’s Mexican Wall

About the Author
With over a decade of trading expertise and 100,000 fulfilled clients in 160 countries worldwide, easyMarkets will tick all your boxes whether you are a new or experienced trader, affiliate or introducing broker. [space height="20"] Trade 300+ markets including currencies, commodities, metals, vanilla options and indices from one place without the jargon, complicated offers and confusing terms! [space height="20"] Welcome to the exciting world of trading. Welcome to easyMarkets.

Leave a Reply

*