FX Daily: High energy | MENAFN.COM – MENAFN.COM

FX Daily: High energy | MENAFN.COM – MENAFN.COM

(MENAFN- ING) After a week dominated by central bank meetings, the focus in FX markets this week switches to politics, energy, and European inflation numbers. Unless the US Congress can find a way forward on the US debt ceiling, expect the risk environment to remain fragile and the dollar bid on dips. The week starts with focus on the German election result but serves as a reminder that it is a big week for politics. In particular, US Congress needs to raise or suspend the US debt ceiling such that the US avoids a government shut-own in mid-October. So far there are no signs that the Senate Republicans want to play ball here, which could create a few nervous weeks for US equity markets. Certainly, it seems that US Money Market Funds with exposure to US Treasury Bills are shortening durations to make their portfolios more liquid. Congress will also try to make progress on a bi-partisan infrastructure bill, albeit the $550bn package seems far less ambitious than original plans. Also very much in focus is the strong rise in energy prices around the world, be it oil, gas or coal. These high prices look like they will be with