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FX Update: A debt ceiling solution would likely boost USD
The USD rally was partially checked on the announcement Friday that debt ceiling talks had collapsed. We discussed last week that a deal to lift the ceiling could drive considerable USD strength due to the need for the US treasury to rebuild its reserves to the tune of perhaps half a trillion USD. It feels like an exercise in futility to discuss the latest debt ceiling talk developments, as the sense of compromise that was in circulation late last week evaporated entirely on Friday. With Biden back in Washington after the G7 trip to Japan, direct talks between the White House and House speaker McCarthy are set to ... (full story)