Investing.com - The euro dipped lower against the dollar on Wednesday after ratings agency Fitch said it could cut its triple-A rating on the U.S., as politicians in Washington remained deadlocked over a deal to avert a sovereign debt default.
EUR/USD hit 1.3480 during late Asian trade, the session low; the pair subsequently consolidated at 1.3521, dipping 0.03%.
The pair was likely to find support at 1.3475, the low of September 27 and resistance at 1.3570, Tuesday’s high.
Fitch placed its triple-A rating on the U.S. on “rating watch negative” on Tuesday and said a downgrade is possible. The ratings agency said the political impasse over a deal to reopen the government and raise the debt ceiling has undermined confidence in U.S. economic policy.
"Although Fitch continues to believe that the debt ceiling will be raised soon, the political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default," the firm said in a statement.
If an agreement to raise the federal borrowing limit is not struck ahead of Thursday’s deadline, the U.S. will face an unprecedented sovereign debt default.
Senate leaders were continuing negotiations aimed at ending the fiscal impasse, after a last minute deal put forward by House Republicans collapsed on Tuesday.
Elsewhere, the euro was steady against the pound, with EUR/GBP dipping 0.01% to 0.8455 and was higher against the yen, with EUR/JPY rising 0.27% to 133.10.
The U.K. was to release its monthly jobs report later Wednesday, while the euro zone was to produce reports on consumer prices and the trade balance.
EUR/USD hit 1.3480 during late Asian trade, the session low; the pair subsequently consolidated at 1.3521, dipping 0.03%.
The pair was likely to find support at 1.3475, the low of September 27 and resistance at 1.3570, Tuesday’s high.
Fitch placed its triple-A rating on the U.S. on “rating watch negative” on Tuesday and said a downgrade is possible. The ratings agency said the political impasse over a deal to reopen the government and raise the debt ceiling has undermined confidence in U.S. economic policy.
"Although Fitch continues to believe that the debt ceiling will be raised soon, the political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default," the firm said in a statement.
If an agreement to raise the federal borrowing limit is not struck ahead of Thursday’s deadline, the U.S. will face an unprecedented sovereign debt default.
Senate leaders were continuing negotiations aimed at ending the fiscal impasse, after a last minute deal put forward by House Republicans collapsed on Tuesday.
Elsewhere, the euro was steady against the pound, with EUR/GBP dipping 0.01% to 0.8455 and was higher against the yen, with EUR/JPY rising 0.27% to 133.10.
The U.K. was to release its monthly jobs report later Wednesday, while the euro zone was to produce reports on consumer prices and the trade balance.