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warned of a “deep economic crisis” unless the nation’s debt ceiling is increased by today’s deadline.
The dollar has also come under pressure with those negative numbers coming out of the US on weak GDP figures. The greenback weakened to US$1 4492 against the euro from US$1 4377. Right now the market is bearish on the dollar as the dollar index is in abyss.

The dollar index which tracks the greenback against the currencies of its six trading partners fell to a record low at 73,624 from 74,06. The further weakness on the dollar has ignited the market to look for other safe haven currencies.
The dollar dropped to 80,13 Swiss centimes in London from 80,61 in New York yesterday. It earlier reached an all-time low of 80,06 centimes.

The yen was at 78,09 per dollar from 78,29, after touching 77,90, the strongest since March 17. Japan’s currency weakened to 113,18 per euro from 112,55. The greenback fell to US$1 4399 against the euro from US$1 4420, after reaching

US$1 4501.
The market remains bullish on the Swiss franc as the currency seems to do well when there is turmoil in and around Europe. Automatic orders have also triggered the yen to rally to record highs against the dollar and the euro. The pound sterling weakened on poor data within the UK.

Consumer spending fell below levels since June, triggering a bearish for the pound as it was trading at US$1,6310 from US$1,6470.
UK consumer confidence fell in July as Britons became more pessimistic about the economic outlook, adding pressure on the Bank of England to keep the benchmark interest rate at a record low.
The Swiss franc and the yen remain the biggest bets for the market in terms of currencies; the Aussie dollar remains a buying opportunity.

In Australia the mining investment boom pushed the so-called Aussie dollar to its highest levels since 1983 against the US dollar was trading at US$1,1081 last week. The resource-rich nation has seen demand for energy and commodities in Asia pushing the currency to such levels.
The Reserve Bank of Australia is now concerned on the strong Aussie dollar as this will hurt export, manufacturing and tourism sectors as global demand slows.

Despite the Aussie dollar being the biggest mover last week, the currency is poised to drop against the yen on US debt deadlock and Spain coming back into the limelight as rating agencies are likely to downgrade the country’s economic outlook. Risk appetite will possibly decline sapping demand for currencies like the Aussie dollar, New Zealand dollar, the Brazilian real, Mexican peso, Canadian dollar, the South African rand – Africa’s biggest currency and the Norwegian Krona.

“All these currencies are relatively vulnerable to risk sentiment.”
The South African rand benefited from a gold rally earlier as it is the world’s fifth largest producer of the metal together with platinum as this accounts for 20 percent of the nation’s exports.
The other driver for a strong rand is a weak dollar, which continues to fall as we saw those weak GDP figures together with the unemployment rate figures in the month of July that remained unchanged at 9,2 percent since June.

Risk sentiment and external shocks still remain a threat for the rand as we see Europe’s and the US debt sapping demand for high yielding assets. Gold rose to a record US$1 631,50 an ounce on demand for an investment haven amid mounting concerns on the US debt impasse and signs of a faltering economy.

Crude oil fell to US$95,70 as the US economy grew less than expected in the second quarter and the US debt issue still a concern. The GDP figures missed expectations and that’s created more pressure on crude oil.

My chart for the day the is that markets are struggling for direction and the politics is weighing heavily on sentiments.

• For more information contact Prodigy Chinanga on 0772753594 or [email protected]