The RBNZ kept the OCR steady at 2.5%, but pointed to the need for a near-term rate hike. Other than that, there was very little fresh news during the Asia session. The White House and Congress remain deadlocked in talks over the debt ceiling, and there does not appear to be any clear consensus on which deal, if any, has the best chance of being passed before August 2. The plan offered by Speaker Boehner appears to be falling out of favour as the President has suggested it would be vetoed, while the Congressional Budget Office warned that savings would not be as high as claimed. The White House noted that Congress is still expected to act decisively and a message must be sent to the world that “the US pays on time”. Investors are becoming more nervous, with equities leading the way – the S&P was down 2% and Asian equities have followed suit. On the data front, the Fed’s Beige Book showed the US economy slowed in 8 out of the 12 regions. EURUSD traded 1.4330-1.4377 and USDJPY traded 77.73-78.15. Continue reading →