Dollar Remains Broadly Lower on U.S. Politics

Dollar Remains Broadly Lower on U.S. Politics
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(January 22, 2018) The U.S. dollar remained broadly lower against other major currencies on Monday, as the U.S. government shutdown on Friday continued to weigh on demand for the greenback.

The U.S. government shutdown went into effect at midnight on Friday after Senate negotiators failed to reach an agreement on a last minute deal to keep the government funded amid a dispute over immigration and border security.

The Senate was due to hold a vote at 12:00 PM ET (17:00 GMT) on Monday on a temporary measure to fund the government through Feb. 8, but uncertainty remained over whether it had enough votes to pass.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.25% at 90.26 by 05:15 a.m. ET (09:15 GMT), not far from Friday’s three-year low of 89.96.

The euro and the pound were higher, with EUR/USD up 0.25% at 1.2253 and with GBP/USD gaining 0.31% to 1.3902.

The single currency found support following news that Germany’s Social Democratic Party voted on Sunday to begin formal coalition talks with Chancellor Angela Merkel’s conservatives, easing a political deadlock in the euro area’s largest economy.

The yen was steady, with USD/JPY at 110.69, while USD/CHF slid 0.30% to 0.9597.

Elsewhere, the Australian and New Zealand dollars were stronger, with AUD/USD up 0.15% at 0.8010 and with NZD/USD advancing 0.48% to 0.7306.

Meanwhile, USD/CAD edged down 0.18% to trade at 1.2471.

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