USD is nearing the ceiling. Overview for 22.05.2023

The market’s most traded currency pair starts the new week of May cautiously. The current EURUSD quote is 1.0820.

The currency market’s attention is still focused on the US national debt and the debates around it. So far, the discussions between the Republicans and Democrats have proved non-productive. It would be great for them to reach a framework agreement to ease excessive market tension. However, this expectation has failed to come true yet.

Each negotiator accuses their opponent of having unreasonable demands. The Republicans consider it necessary to agree to cuts in federal spending in exchange for approval to raise the national debt ceiling. The Democrats, however, see this as impossible.

US Secretary of the Treasury Janet Yellen has warned the negotiators that the federal government might not meet the mid-June deadline because it will run out of money for financing its spending much earlier.

The time is running out. The parties must reach an agreement by 1 June, otherwise, the consequences will be severe.