Session Recap: USD strengthens on US deal hopes

FXstreet.com (Córdoba) - The USD strengthened Tuesday, especially against European currencies, on optimism over a potential deal that will re-open the US federal government and avoid a default.

The EUR/USD came under strong pressure and fell back below the 1.3500 level to its lowest in 2 weeks at 1.3479, weighed by mixed ZEW data.

The GBP/USD broke below 1.5950 and bottomed out at 1.5914, roughly at the same level it did last week. Meanwhile, the USD/JPY failed to break above 98.70 and is trading just above the 100-day SMA. The Aussie is among the top performers after the RBA minutes, although the rally tempered after reaching a 4-month high of 0.9547.

During the American session, watch for NY Fed Empire State Survey, speech by Fed's Fisher and earnings from Citigroup, Coca-Cola, Johnson & Johnson, Intel, Yahoo.

Main Headlines in Europe:

Germany: Import Price Index rises 0.1% in August

Morning outlook: After successive debt ceiling compromise rumours markets are waiting for the real deal

http://www.fxstreet.com/news/forex-news/article.aspx?storyid=bac6530f-ce19-4eba-8a9f-780cd88c1f17

UK: Annual CPI up 2.7% in September

UK: Annual PPI – Output rises 1.2% in September

UK: DCLG House Price Index rises more than expected in September

UK: Annual Retail Price Index grows 3.2% in September

EMU: ZEW Survey – Economic Sentiment increases to 59.1 in October

Spanish borrowing costs drop at bill auction

Van Rompuy: EU working with Cyprus on lasting solutions for the economy

Commodities consolidate lower amidst heightened ambiguity

Commodity prices are slightly moving downwards on Tuesday, as US uncertainty keeps market participants sidelined.
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