US Dollar Falls as Government Shutdown Continues; Loonie Steady Ahead of Busy Week
Published January 22, 2018
The US government shutdown continues into its third day after talks between Democrats and Republicans failed to reach an agreement on funding for government operations. Senate Majority Leader Mitch McConnell noted the Sunday vote was cancelled and is postponed until 12:00 PM EST today.
Funding for federal agencies officially ran out at midnight on Friday, marking the first US government shutdown since 2013; non-essential US federal employees and government contractors will be put off work as US lawmakers struggle to gather required votes to continue government spending.
The US dollar remains near 3-year lows as investors worry that the government shutdown could potentially dampen quarterly economic figures. Global stocks remain steady as equity investors weigh bearish bets against the US dollar against ongoing corporate strength.
The euro moved higher this morning as political developments in Germany boosted the strength of the multi-national currency. German Chancellor Angela Merkel’s coalition took one step closer to becoming a reality as opposition parties voted to begin formal talks.
Oil prices enjoyed modest gains after Saudi Arabian energy minister noted OPEC and non-OPEC oil producers are in agreement that cooperation on production should extend beyond 2018; the International Energy Association said a ramp up in US production (near output levels of Russia and Saudi Arabia) could potentially offset gains brought on by OPEC cuts.
The loonie remains strong off of solid manufacturing sales data from last week. Canadian investors look towards further direction from NAFTA talks in Montreal this week as well as economic data on retails sales and consumer prices.