Buckinghamshire, United Kingdom (26th Sept 2011) – Currencies.co.uk, a leading foreign currency exchange provider, have been discussing the possible implications should the US government default on its debt repayments. With the August 2nd deadline fast approaching, the Obama administration’s options are lessening by the day.
As of May 2011, around 40% of US government spending relied on borrowed money. The only way that level can be maintained is for the US national debt ceiling, which currently sits at $14.3 trillion, to be increased. The US Constitution rules that any lifting of the borrowing cap must be agreed upon by Congress, but the differing views of Republicans and Democrats have thus far made a deal impossible.
The Democrats have proposed a plan that would see the debt ceiling raised by $2.4tn, with the intention of cutting the budget deficit by $2.7bn without compromising programmes that support the poor and elderly. Conservative Republicans are staunchly against any debt increases that would result in rising taxes, preferring instead to cut government spending by $1.2tn, even at the expense of previously mentioned programmes aimed at helping the vulnerable.
“The currency markets are waiting for August 2nd with baited breath,” commented a spokesperson for Currencies.co.uk. “It seems unthinkable that the US would default on their borrowings, but as the deadline looms it becomes an increasingly possible outcome. If the volatility during the Greek financial crisis is anything to go by, an American default could lead to unprecedented movements in the currency markets.”
For more information on Currencies.co.uk’s foreign exchange rates and money transfer services, visit their website at www.currencies.co.uk or call 0800 328 5884.
Currencies.co.uk is the new trading name Foreign Currency Direct. Currencies.co.uk is a leading foreign exchange providers and the first choice for thousands of businesses and individuals to save money when transferring funds. The well-established, award-winning company provides a friendly, efficient service to people moving money for everything from purchasing overseas properties to emigration and investment abroad. In the past ten years Currencies.co.uk has helped over 30,000 Britons to buy and sell property overseas.
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