Forex News – Pessimism Prevails as U.S. Lawmakers Fail to Reach an Agreement to Raise the Debt Ceiling

Pessimism continued to dominate global markets on Monday, as U.S. lawmakers failed to reach an agreement to raise the debt ceiling, where Democrats and Republicans continue to debate over a compromise plan to raise the debt ceiling and reduce the deficit before an August 2, deadline set by the U.S. Treasury Department.

The United States faces the risk of defaulting on its debt payments if a deal is not reached, and such an event is expected to lead to a huge panic wave across global markets, where some even believe it could send the U.S. economy back into recession.

Stocks in the United States fell by opening on Monday, where the Dow Jones Industrial Average was down by nearly 0.50% to trade around 12,620, while the S&P 500 index was down by nearly 0.50% to trade around 1338. European stock indexes were mixed before closing on Monday, where FTSE 100 was down by nearly 0.15% to trade at 5927 but the DAX was up by nearly 0.35% to trade around 7351.

The U.S. dollar was little changed against a basket of major currencies on Monday, where the U.S. dollar index was trading at 74.22, compared with the opening level at 74.16. The Euro slightly fell against the Dollar, where the EUR/USD pair traded at $1.4349, compared with the opening level at $1.4366, and the British Pound also dropped against the Dollar, where the GBP/USD pair traded around $1.6280, compared with the opening level at $1.6298.

Gold prices erased earlier gains on Monday after rising to a new record high at $1621.56 an ounce, where gold was trading around the opening level at $1615 an ounce, and crude oil prices were also little changed to trade around $99 a barrel.