As the dollar languished near eight-month lows on Friday, currency strategists say the U.S currency could head lower still as markets push back expectations for a tapering of the Federal Reserve's monetary stimulus.
The dollar index, which measure's the greenback's value against a basket of other major currencies, stood at about 79.71. It held within sight of eight-month lows hit Thursday as investors weighed the fallout of the crisis in Washington that ended a day earlier with a deal to reopen the government and avert a debt default.
On Friday, the Chinese yuan extended its rally to a new record high at about 6.09 per dollar, putting it on track for its biggest weekly gain in over a year.
(Read more: 'Unnecessary damage' to economy from shutdown)
Economists say that the 16-day partial shutdown of the U.S. government and uncertainty over the next round of budget and debt ceiling talks early next year could encourage the Fed to keep its asset-purchase program in place for longer than anticipated to support the U.S. economy.