Dollar Subdued, Has Potential for Relief

The US dollar remains subdued by the budget impasse, but may find a relief soon on signs that politicians become more willing to find a consensus as a government shutdown drags on. The currency slid versus the euro, gained on the Great Britain pound and moved sideways against the Japanese yen.

President Barack Obama said that there will not be negotiations on the budget until the Republicans raise the debt ceiling without conditions. There were signs that the Republicans are wavering. Indeed, Obama said:

There are enough Republicans and Democrats in the House of Representatives today that, if the Speaker of the House, John Boehner, simply let the bill get on the floor for an up-or-down vote, every congressman could vote their conscience — the shutdown would end today.

The greenback was boosted by unemployment claims that rose only a little by 1,000 to 308,000 last week instead of climbing to 315,000 as was predicted. At the same time, the non-manufacturing Purchasing Mangers’ Index of Institute for Supply Management fell last month more than was expected.

EUR/USD advanced from 1.3576 to 1.3920 as of 23:52 GMT today and its daily high of 1.3645 was highest since February 4. GBP/USD dropped from 1.6220 to 1.6154. USD/JPY was down a little from 97.43 to 79.32.

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