The political stalemate over the US budget is so far having little impact on the financial markets, but that could quickly change as the October 17 funding deadline approaches, say market commentators.
The impasse has so far shut down the Federal Government for nine days. If an agreement is not reached, it could prevent the raising of the US Government's US$16.7 trillion ($20 trillion) borrowing limit.
"The markets so far have been pretty unruffled by it all," said Mike Jones, currency strategist at the Bank of New Zealand.
"In some ways that makes sense because the consensus view is that the politicians will continue to dither until they get some sort of 11th-hour compromise, in which case if you did take up a position you would have to quickly unwind it." Market participants said that if the US Government did default on a debt repayment it would be a technical matter.
"A US Government default, if it did happen, would not be through the inability of the US to service its debt - it would be a technical default and one that would be easily avoidable," Jones said.
