Thursday, October 17, 2013
DJ: Dollar Rises On Hopes For Debt-Ceiling Resolution
The dollar held onto gains against major currencies Wednesday after the Senate reached a deal to reopen the federal government and avoid a default.
The bipartisan Senate deal would keep the government open through Jan. 15 and temporarily raise the country's borrowing limit until Feb. 7. A negotiating committee would be responsible for crafting a longer-term solution. Hopes for a deal earlier in the day had already pushed the U.S. currency to a two-week high against the yen and a one-month high against the U.K. pound.
"We've seen through the past couple of weeks that the shutdown and the debt ceiling deadlock have been negative for the dollar, so it's rallying as we appear to be moving closer toward a deal," said Vassili Serebriakov, currency strategist at BNP Paribas in New York.
The U.S. government has been shut down for 16 days as lawmakers clash over the federal budget and debt ceiling. If no deal is reached to raise the country's borrowing limit by Thursday, the Treasury could risk missing upcoming interest payments on its debt and go into default.
Against the yen, the dollar rose 0.6% to Y98.80. The euro fell 0.1% to $1.3510. The U.K. pound is also down 0.5% to $1.5924.
The Wall Street Journal Dollar Index, which measures the dollar against a basket of major currencies, rose 0.2% to 72.90.