EUR/USD with gains as US budget debates continued

The euro traded slightly higher against the US dollar on Friday, but the upward movement seemed to remain limited as the budget talks in order to avert a US default provided support to the greenback.

EUR/USD touched a session high at 1.3545 at 3:30 GMT, after which consolidation followed at 1.3538, rising 0.14% for the day. Support for the pair was to be received at September 30th low, 1.3478, while resistance was to be encountered at October 7th high, 1.3592.

Republican House Speaker John Boehner’s proposal and President Obama’s willingness to continue debating marked the first serious negotiations between the parties to find a solution to the budget crisis and avoid the catastrophic economic consequences that the US Treasury Department said would be triggered in case of a default. The White House released a statement in which said that “no specific determination was made” and that the two sides discussed the “potential paths forward” during the 90-minute meeting, Bloomberg reported. President Obama has stressed on the importance of raising the debt ceiling and ending the partial government shutdown, before broader fiscal talks are to be considered. “I hope the Republicans decide what they want and we’ll be happy to work with them in any way,” Senate Majority Leader Harry Reid of Nevada said at the White House after the meeting, cited by the same media. “We’ll just wait and see because they cannot decide what they want.” A vote on the debt-ceiling bill may occur as soon as tomorrow.

At the same time, US Treasury Secretary Jack Lew reiterated on Thursday that the nations borrowing authority will lapse on October 17th and also warned that the political crisis is starting to cause negative influence upon the economy.

Meanwhile, it became clear that Germanys final consumer price index (CPI) remained flat in September compared to August in consonance with projections. Annual consumer inflation remained stable in September at 1.4%.

In addition, German wholesale price index rose 0.7% in September on a monthly basis, completely neutralizing the 0.6% drop, recorded a month ago, while experts had anticipated that the index will advance less in September, 0.5%. The annual performance of the index showed a 2.2% decrease in September, following another 1.7% drop in August.

Also, the G-20 meeting is scheduled to begin today, as financial ministers are expected to focus on curbing the risk of US default on debt obligations.

Elsewhere, the euro was steady against the British pound, as EUR/GBP cross rose 0.09% to trade at 0.8477 at 7:55 GMT. EUR/JPY pair was advancing 0.44% on a daily basis to trade at 133.31 at 7:56 GMT.