The move follows President Obama's Friday rejection of a proposal by House Republicans for a short-term increase of the ceiling until November 22nd.
"It is so counter-intuitive to say this but I do think the USD will rally in the event of a default. Yields will spike up across the whole U.S. yield curve and that will attract investor interest," said Jeff Halley, Senior Manager FX Trading, Saxo Capital Markets.
Shanghai 0.4% higher
China's benchmark index extended gains after climbing 2.5 percent for the week ending Friday after annual consumer inflation rose to a seven-month high in September.
"Employment is fairly stable and domestic consumption is still going to trend higher so those two factors forgive some of the ills in China's economy at the moment," said Lorraine Tan, director of equity Research at S&P Capital IQ.
Meanwhile, producer prices fell an annual 1.3 percent, close to expectations for a 1.4 percent decline. The data follows September's surprise 0.3 percent drop in exports over the weekend.
Railway stocks led the gains after Premier Li Keqiang opened a Chinese high-speed rail exhibit in Thailand, aimed at introducing Chinese rail technology to the Thai public. China Railway Group and CSR Corp climbed 10 percent each.
India up 0.4%