US: A SHUTDOWN IS LOOMING, BUT LITTLE INFLUENCE ON THE US DOLLAR – COMMERZBANK

Another shutdown is looming in the US. What does all this mean for the Dollar? Economists at Commerzbank analyze Greenback’s outlook.

Yet another shutdown in the US? 

This is not the first time that a shutdown is looming. There have also been longer actual shutdowns until an agreement was reached in Congress. In the end, a solution was always found, because neither of the two major parties had any interest in letting it come to the worst case (i.e. a default). Each is flexing its muscles and trying to come up with convincing arguments for its point of view. In the end, there will probably be a solution, even if it's just another transitional financing arrangement that doesn't solve the problem but postpones it into the future.

I therefore see little, if any, influence of this primarily political debate on the US Dollar. So far, the USD has not reacted either. Perhaps the market is also slowly becoming dull after the many impending shutdowns, which is why nobody cares.