A default continues to threaten the US as Congress still could not reach a deal on the debt limit.

But for today, market focus will be on the Fed protocol even though it could not lead to noticeable changes. As members also could not reach a consensus on the need to continue interest rate hikes and the minutes will not reveal anything different, market sentiment will remain the same.

In another note, US Treasury Secretary Janet Yellen already unsettled markets with her warnings about a possible default in the US. Her statements today could shift the situation if she mentions possibilities to avoid the crisis.

Although everything points to a negative scenario unfolding, there remains a slight chance of a positive outcome as apart from the debt problem itself, the deadlock could be ascribed to the political confrontation between Democrats and Republicans.

The almost uninterrupted rise in Treasury yields, particularly the surge above 3.7% of the 10-year bonds, reflects investors' concerns about the ability of the Fed to meet its debt obligations. Concluding a deal on the issue will ease the pressure on stock markets.

Forecasts for today:

AUD/USD

The pair trades within the range of 0.6580-0.6800. Deteriorating market sentiment due to events in the US and relations with China may lead to a break below the lower limit, prompting a decline towards 0.6525.

GBP/USD

Demand for pound dwindled after the release of inflation data in the UK. Growth will resume amid positive news on the US default issue, as well as a break above 1.2470. That will prompt a rise to 1.2550. Failure to conclude a deal will put pressure on the pair, leading to a drop to 1.2340.