The Australian equity market is pointed to a higher open today after the US markets recovered from the initial drop pre trade Monday. Overnight the US stocks ended the session down after the deadlock in Washington’s debt negotiations curbed investors’ risk appetite and left them uncertain whether the U.S. can hold on to its triple-A credit rating.
The Dow lost 88.36 points to close at 12592.80, this is its third drop in four sessions. The blue-chip index fell by as much as 145 points early in the session, after the collapse of the debt-ceiling talks triggered a flight to safer assets such as gold, which settled at a record $1,612 an ounce. Stocks recovered some ground as Republicans and Democrats each pledged separate efforts to raise the debt ceiling. The S&P500 index shed 7.59 points to close at 1337.43.
The USDCHF traded as low at 0.8022 overnight which is now a record as investors demand the safest assets while dropping the USD and EUR on the back of lawmakers failing to agree on raising the nations $14.3 trillion debt and Greece’s credit rating cut. At time of writing this report it was sitting at 0.8054.
The NZDUSD dropped to a low of 0.8613 in early Asian trade after a government report showed exports shrank more than economists had estimated.
Gold traded as high as 1624 per ounce as investors demand the metal as a haven investment. Gold is now up 13 percent this year and heading for the 11th straight annual gain.
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Source Bloomberg, Dow Jones News