The US dollar is believed to rise opposite the Swiss franc today after the US House of Representatives passed a bill to extend the nation’s debt limit until May, deferring a potential budget debate with the White House. Likewise, expectations that manufacturing in the US held up in January and that a leading economic index rebounded in December are seen to support the Greenback on continuing signs of recovery in the world’s largest economy.
The US House yesterday approved a short-term debt ceiling fix that would extend the country’s borrowing authority until May while also applying a provision that would suspend lawmakers’ pay if they do not pass a budget by April. The measure, which is widely expected to be approved by the Senate, would essentially buy lawmakers some breathing room to hammer out details for a more permanent solution to the nation’s fiscal woes. Named as the “No Budget, No Pay Act of 2013,” the bill aims to draw Senate Democrats into the debate by requiring both chambers to pass a formal budget resolution by April 15. If either chamber fails to meet this deadline, lawmakers’ pay is suspended until a budget is passed.
The measure also avoids for the time being a repeat of the 2011 debt ceiling standoff that rattled the financial markets and resulted in a downgrade of the government’s triple-A rating. The Treasury is expected to exhaust remaining capacity under the $16.4 Trillion debt limit between mid-February and early March. As such, the bill avoids the immediate threat of a US default by suspending limits on the government’s ability to borrow until May 19. Congress would then have to agree on a new, longer-term debt ceiling increase around that time. With the development likely easing some uncertainty over the US’ fiscal problems, the Dollar is deemed to continue to rise.
Meanwhile, a report by the Conference Board is believed to suggest that the US economy is continuing its economic recovery path. Its Leading Index is estimated to have gained by 0.4 percent in December after falling 0.2 percent in the previous month. Improvements in the housing market and on consumer spending likely drove the increase in the index. Meanwhile, factory conditions across the US likely held up this month. After registering 54.2 points in December, the index is projected to come in at 53.2 points in January, still the second highest reading since May 2012. Considering these, a long position is then advised for the USD/CHF trades today.
For more news, analysis, technical charts and candlestick analysis, visit AlgosysFx Forex Trading Solutions