European markets welcome US debt deal

European markets have welcomed the deal to raise the US debt ceiling, easing worries about a potential default or credit downgrade.

Stock markets in London, Frankfurt and Paris all opened higher, while Asian markets closed in similar fashion.

But traders sounded a note of caution, warning that the deal still needed to be passed by the US Congress. At the same time, doubts remain over whether the plan will be enough to prevent Standard & Poor’s from cutting the country’s credit rating.

One banking group, Rabobank, says the views of rank and file Republicans will be critical in determining whether the market considers it a firm deal.

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