After months of fighting, Republican and Democratic leaders have come to an arrangement that lifts the US debt ceiling by up to US $ 2.4trillion from the current US $ 14.3trillion.
It is understood that the other part of the deal involves the US government deficit being cut by a similar amount through the next decade.
Unless an agreement was reached by tonight the US could have defaulted on its debts – and that would have had horrendous consequences for not only the US but many other countries around the world.
As talks were mired in uncertainty in the run up to the deal, stock markets around the world were subject to jittery trading.
The dollar was also off against a basket of currencies last week.
Today saw a different picture – global bourses bounced back as traders reacted positively to the news.
However, some gains were later pegged back by concern about the longeivity of the US’s triple-A credit rating – indicating that we are not yet out of the woods.