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Dollar stuck near 8-month low as US debt fears persist

Tuesday, 8 Oct 2013 | 3:42 PM ET
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The dollar remained near its recent eight-month low against major currencies on Tuesday as U.S. lawmakers struggled to find a solution to the country's budget and debt problems that could potentially lead to a default if left unresolved.

Against the yen, the dollar edged up from a two-month low although it gave up some gains in the New York session. Analysts said the U.S. currency will likely stay under selling pressure as long as the standoff in Washington continues.

The dollar index, which measures the U.S. currency's value against a basket of currencies, rose 0.1 percent to 79.993, not far from last Thursday's eight-month low of 79.627.

With the partial U.S. government shutdown in its second week and only nine days left for Congress to raise the U.S. debt ceiling, Obama said he would accept a short-term increase to avoid a default.

The dollar rose 0.3 percent to 96.96 yen, having dropped to 96.55 yen in Asian trade, its lowest since Aug. 12. It then recovered to trade back above chart support at 96.72 yen, its 200-day simple moving average. Since it last traded below that measure, in mid-November 2012, the dollar has gained 21 percent against the yen.

The euro was down slightly at $1.3573, pulling away from an eight-month high of $1.3645 touched on Thursday. It showed little reaction to data which showed German industry orders unexpectedly fell in August although the trend was still for growth.

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