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Forex pairs in this Article » EUR/USD (San Francisco) - The US Dollar was the biggest loser of the day as the Greenback traded under pressure from every single side in the day after the shutdown. The EUR/USD jumped to highs since February 1st at 1.3683 while the USD/JPY declined to 1-week low at 97.75.

In a chaotic day, Chinese agency Dagong downgraded US rating while Goldman Sachs and IMB posted weaker than expected earnings in premarket hours. Economic data had almost no effect in market as currencies and stocks didn't reacted amid worst than expected jobless claims and well above consensus Philly Fed manufacturing index.

Stocks rallied despite the money outflow of the United States as UBS Forex trading chief Paul Richards said in CNBC: "We're 10% of the market and we see money flowing out of the US after this [debt ceiling] deal." US 10-Y bonds declined 8bp to 2.59% and the 1-month fell to 0.01%.

Meanwhile Federal Reserve official commented that "more stimulus may be needed" as Kocherlakota affirmed. Evans said taper decision was 'silenced' by the shutdown topic

The EUR/USD is closing the day at multi-month highs around 1.3683 after posting its biggest single day advance since September 18. Now the question is if the EUR/USD is focused to test the 1.3710 2013 year high. Valeria Bednarik think so, "The pair has barely retraced its gains and consolidates near mentioned high [1.3683], supporting further gains for the upcoming sessions." Bednarik affirms that "1.3710 this year high comes as immediate resistance level and stops above should be large: once triggered expect the pair to advance steadily towards 1.3830 area, next meaningful resistance level." Pay attention to the risk behind verbal interventions from ECB officials.

The GBP/USD jumped to 1.6170, highest since November 4. The Cable is now trading in consolidation mode at 1.6160 with no signs of a probable reversal, as indicators stand flat in extreme overbought levels as price consolidates near the high. The USD/JPY performed its worst day since September 18 with around 80 pips decline in the day to close just below 98.00.

Main headlines in the American Session:

US: Initial Jobless Claims fell to 358K

Canada: Canadian Portfolio Investment in foreign securities rose to $5.65 B in August

US: Philadelphia Fed Manufacturing Survey falls less than expected in October

Fed's Fisher: Congress debt deal just a temporary solution

Obama: US will bounce back from the shutdown

Former Italian PM Monti resigns as party head

Kocherlakota: Talk of taper can send wrong message

Stocks recovered initial losses and rallied on the day after shutdown
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