11 Oct 2013
Whichever way they try to spin it, Republicans have lost the debt ceiling battle
FXstreet.com (London) - News yesterday that the Republicans were the first to blink in the debt ceiling stand-off has helped to rally risk assets. Republican leaders tabled a compromise agreement that would allow for a six-week extension of the debt ceiling in exchange for wide ranging budget discussions. Significantly, the proposal does not include defunding or delaying the Affordable Care Act.
President Obama has yet to agree to the proposals, but whichever way the GOP try to spit it, they have emerged the losers of the war of attrition. Both in terms of policy objectives and political outcomes, President Obama has succeeded in weathering Republican attacks, and, while the episode has done nothing to enhance Obama's credibility, it has significantly dented Republican popularity. And as a second term president, Obama will never have to face the public in another presidential election, whereas the GOP face congressional elections in just over a year.
Obama now bows that he can take a six-week extension of the debt ceiling, and let the Democrat-controlled senate kill any Republican spending cuts.
Now that Republicans no longer have the bullet of potential US default in their gun, they may as we'll be threatening Democrats with a banana.
Higher-yielding currencies gained on the Washington developments. AUD and NZD strengthened 0.24 percent and 0.55 percent respectively against the USD
JPY strengthened to a high of JPY98.5600 on unwinding haven positions.
President Obama has yet to agree to the proposals, but whichever way the GOP try to spit it, they have emerged the losers of the war of attrition. Both in terms of policy objectives and political outcomes, President Obama has succeeded in weathering Republican attacks, and, while the episode has done nothing to enhance Obama's credibility, it has significantly dented Republican popularity. And as a second term president, Obama will never have to face the public in another presidential election, whereas the GOP face congressional elections in just over a year.
Obama now bows that he can take a six-week extension of the debt ceiling, and let the Democrat-controlled senate kill any Republican spending cuts.
Now that Republicans no longer have the bullet of potential US default in their gun, they may as we'll be threatening Democrats with a banana.
Higher-yielding currencies gained on the Washington developments. AUD and NZD strengthened 0.24 percent and 0.55 percent respectively against the USD
JPY strengthened to a high of JPY98.5600 on unwinding haven positions.