Dollar weakens against yen on budget fears
AFPTOKYO--The dollar faced selling pressure against the yen Wednesday as investors fretted about an impasse over the U.S. budget that could lead to a shutdown of parts of the economy.
September 26, 2013, 12:05 am TWN
The greenback fetched 98.64 yen in Tokyo midday trade, from 98.74 yen late Tuesday in New York, and well down from the levels above 99 yen seen Monday.
The euro bought 132.86 yen from 133.00 yen while it was flat against the dollar at US$1.3469.
U.S. lawmakers are approaching a Monday night deadline to find a deal on a new budget. If no agreement is reached some government agencies could be forced to shut down, which could deal a major blow to the U.S. economic recovery.
“Fiscal D-day is looming, spooking investors,” National Australia Bank said.
Traders began moving out of the greenback last week after the U.S. Federal Reserve surprised markets by keeping its US$85 billion-a-month bond-buying stimulus program intact.
Japanese exporters are also selling dollars and euros as they look to lock in profits before the end of the month, dealers said.
The euro found a measure of support from a modest gain in the closely watched IFO German business confidence index for September, which represented the fifth consecutive monthly rise.
However, the single currency is down from multi-month highs of Monday after European Central Bank chief Mario Draghi voiced concern about liquidity in the eurozone banking system.
The dollar was mostly stronger against other Asia-Pacific currencies.
It rose to 11,248 Indonesian rupiah from 11,156 rupiah the previous day, to SG$1.2567 from SG$1.2533.
It also strengthened to 31.41 Thai baht from 31.27 baht, to 43.36 Philippine pesos from 43.35 pesos and to 1,077.94 South Korean won from 1,075.28 won.
The U.S. unit eased to 62.63 Indian rupees from 62.69 rupees,
The Australian dollar slipped to 93.74 U.S. cents from 94.13 cents. The Chinese yuan changed hands at 16.13 yen compared with 16.12 yen.