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The DXY dollar index rose to 78.477, reports Reuters, its highest point since October 10th. Nevertheless, Washington is still expected to push ahead with $1.2 trillion in automatic spending reductions in order to safeguard its AA+ rating.
"If the United States fails to reach agreement and we assume the spending cuts will still be delivered, that would be acceptable to the ratings agencies," said Adam Cole, global head of currency strategy at RBC.
At the moment, the dollar is benefiting from safe-haven status, with investors considering it more reliable than the European common currency or the pound.
Indecision in Europe is having a negative impact on the market. France and Germany were unable last week to agree on the role of the European Central Bank in alleviating the debt situation on the continent.
Posted by Greg Secker
