POSITIVE vibes continue to emerge from Wall Street. The US dollar index continued to head higher as the US equities reached its highest since 2007. The better-than-expected US jobs report, the spending cuts under sequestration, continued selling of Japanese Yen and downward pressure on the euro were the added drivers.
The US Congress has indicated that it is likely that it will provide minimum additional flexibility to the Obama Administration to ease implementation. Sequestration is anticipated to reduce real gross domestic product (GDP) growth in 2013 by about 0.6 percentage points with the effects concentrated in the second and third quarter respectively.