The government and the U.S. House of Representatives, dominated by Republican opposition, agreed to address the debt crisis. They do not want U.S. for the first time have status of defaulted debt to the creditors.
The Deal Was Announced Sunday Night
According to the Associated Press, the deal was announced by President Barack Obama in Washington DC on Sunday evening local time after the phone with House Speaker John Boehner, the Republican Party.
As a form of compromise on the willingness of the House supports the settlement of government debt, Obama agreed with the proposed House of Representatives who want the government to cut its budget by more than U.S. $ 2 trillion within ten years.
Status of default “would be bad for our economy,” Obama said. There is no certainty whether Congress will hold another vote on the agreement with the government.
Stronghold of President Barack Obama and Congress in recent weeks to negotiate with difficult of effort to raise the maximum limit of government debt. If the government proposal was not met Congress until August 2, 2011, the U.S. could be at risk of default of debt and this lowers the U.S. image in the eyes of creditors.
According to BBC news stations, the U.S. government seeks to raise the debt limit, which now amounted to U.S. $ 14.3 trillion, in order to support the routine financing of state and government programs, whose costs are greater. According to statistics, the U.S. government budget deficit of about U.S. $ 200 million per month.
Dollar Exchange Rate Raise Up After The Deal
The agreement affects the exchange rate of the dollar against other currencies. Against to Japanese yen, the dollar rose to above 78.00, after the declaration of President Barack Obama on the debt ceiling, although it then fell slightly to 77.88 yen, still far above the 77.01 yen in North American trade late Friday.
The euro traded at U.S. $ 1.4389, up from U.S. $ 1.4380 late Friday, and recover from losses over the weekend. Dollar index, which tracks the U.S. unit against six other major currencies, rose to 73.867, from 73.846 late Friday.
