US Debt Ceiling Crisis: Foreseen Impacts on Forex Markets
The US debt ceiling crisis remains a critical issue with significant implications for global financial markets. A US default could trigger a credit rating downgrade, elevate borrowing costs, and cause the US dollar to lose its status as a global reserve currency, disrupting trade and investment flows. Emerging economies holding US Treasuries may face severe economic strain, while higher interest rates and financial instability could ripple across households and businesses worldwide. With historical parallels like the 2011 crisis and current challenges such as rising interest rates and political gridlock, understanding the debt ceiling’s impact is vital for navigating market uncertainty.