Hello - US Debt Ceiling deadline day tomorrow

Trading Discussion News and Economy
1

So I have a quick question regarding the impending debt ceiling deadline tomorrow. It would be interesting to understand feelings on the matter. In the scenario the government manages to extend/delay the deadline into Jan 2014, next month or even Feb 2014 how much do we expect this to impact the dollar strength considering? Would this mean it will strengthen considerably or will it only have a minute impact on the currency? With this potential scenario I feel this could only be temporary as ‘tapering’ in October or even this year will look very unlikely as a result. Any thoughts on these points?

Any useful opinions will be most welcome.

2

I’m not a macro economist guy, but I think if the government continues to stay partially shutdown, it hurts the US GDP, so bad for the Dollar? At least, that’s what the market seems to price in and it makes sense because the Fed wouldn’t taper when US economic growth is declining. Now, if the US defaults on its debt, then very bad news for everyone, which is bad for all risk assets I think.

3

Based on how the dollar reacted in 2011, we might see a relief rally pretty soon. The situation was pretty much the same, lawmakers arguing so close to the deadline then coming up with a last-minute deal.