The US Dollar has weakened against the Pound and has fallen against the Euro as fears grow that the United States could default on its debts and tip the world into recession.
Politicians in Washington remain locked in stalemate with either President Barrack Obama or the Republicans prepared to back down over disagreements over the country’s budget.
Negotiations between the White House and Congress broke down over the weekend after President Obama rejected proposals for a short-term increase to the debt ceiling. He refused the offer saying that kicking the issue further down the road will not help Americans or the world.
If a deal to raise the government borrowing limit is not made ahead of Thursday’s deadline, the U.S. will face an unprecedented sovereign debt default and will be the first Western nation to default since Nazi Germany in 1933.
Christine Lagarde, the head of the International Monetary Fund warned that the US must raise its debt ceiling before Thursday’s deadline.
“If there is that degree of disruption, that lack of certainty, that lack of trust in the US signature, it would mean massive disruption the world over and we would be at risk of tipping yet again into recession” Lagarde said in an interview with ABC.
The ongoing government shutdown in the country is beginning to impact the nation’s economy and has affected national parks in the US, governmental departments and even war cemeteries in Normandy. No sign on a deal over the US budget is in sight either adding to the sense of unease among investors.
Pressure from China, Japan and many other nations and organisations has done little to end the situation which has the potential to plunge the world back into a global recession and possibly a depression.
President of the World Bank Jim Yong Kim warned; “The closer we get to the deadline the greater the impact will be for the developing world. Inaction could result in interest rates rising, confidence falling and growth slowing. If this comes to pass it could be a disastrous event for the developing world and that will in turn greatly hurt the developed economies as well.”
US Dollar (USD) Current Exchange Rates
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6247
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7361
The US Dollar/ Canadian Dollar Exchange Rate is currently in the region of: 1.0353
The US Dollar/ Australian Dollar Exchange Rate is currently in the region of: 1.0551
The US Dollar/ New Zealand Dollar Exchange Rate is currently in the region of: 1.1960
The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 98.1651
The US Dollar/ South African Rand Exchange Rate is currently in the region of: 9.9402
The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.6006
The Euro/ US Dollar Exchange Rate is currently in the region of: 1.3582
(Correct as of 14:40 pm GMT)
Comments are closed.