Deadline on US Debt Ceiling Looms |
The US dollar was trading 0.2% above its record high against the Swiss franc before the US House of Representatives voted on a plan to cut government spending in exchange for raising the country’s debt ceiling.
The dollar was also 0.2% below its lowest level against the New Zealand dollar, before analysts’ predictions showed that durable goods orders in June grew at a much slower pace. The yen reached a four-month high against the dollar amid speculation that the Japanese government might have to intervene again on behalf of the national currency to prevent a strong yen from hurting exports and hindering the nation’s economic recovery.
“The dollar’s tendency to weaken will still have a stronger influence on the market than strong record highs in export-oriented currencies,” says Greg Gibbs, currency strategist at the Royal Bank of Scotland Group Plc. in Sydney. “The market is clearly providing risks for a further downgrade” on the US’s credit rating. As of 8:28AM in Tokyo, the dollar was trading at 80.12 Swiss centimes and at 80.13 centimes in New York when it fell to a record low of 79.98 centimes. The American currency cost 87.12 cents per one New Zealand dollar after reaching a record low of 87.43 cents yesterday.
Yesterday, the dollar remained virtually unchanged and was trading at 77.93 yen after dropping to 77.83 yen, a level unseen since March 17. The dollar rose to $1.4499 against the Euro, up from $1.4511.
Meanwhile, the Obama administration is threatening to veto a bill spearheaded by Speaker of the House John Boehner which would provide a two-stage increase of the US debt limit of $14.300 trillion in exchange for $3 trillion in cuts to government spending. The White House’s Office of Management and Budget stated that it would be “decidedly against” such measures. The vote on the bill has been rescheduled to today in the Republican majority-run House of Representatives.
Nevertheless, the US stock exchange is active as ever despite the country’s budget problems and continues to present investors with unexpected news. Deep Trust Trading analysts remind traders that quarterly profit and loss reports for companies in the public and private sectors are currently being published. Amazon.com Inc (AMZN),the largest Internet retail store, reported record profits on sales of its Kindle electronic reader and provisions of media services which surpassed all analysts’ expectations. The company’s stock rose at the end of the trading session in New York. In the second quarter, the retailer’s net profit was $191 million, or 41 cents per share, compared to $207 million and 45 cents per share a year earlier. Compared to the 34 cents-per-share profits that analysts were predicting, these figures are quite impressive. The company’s net sales grew to $9.91 billion compared to the $9.38 billion predicted.
Deep Trust Trading analysts reported some other positive market news regarding Apple Inc (AAPL). Its stock exceeded $400 per share for the first time a week after it reported record sales and profits. The company’s market capitalization is on track to surpass Exxon Mobil Corp (XOM) to become the most valuable company in the world.
Shares of Apple Inc went up $4.91 to reach $403.41 in the NASDAQ. Apple has grown 25% so far this year, increasing 7% immediately after the company reported its third quarter results on July 19.
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