Dollar finds support

Published: 10 Oct at 9 AM Tags: Dollar,

The US dollar appears to be getting some support from hopes that the deadlock in Washington may be breaking. The greenback picked up 0.2 per cent against the yen to 97.53 yen. The dollar index, an indicator of how the US currency is doing against other major world currencies, is holding firm at 80.41 after hitting an eight-month trough of 79.627 last week.

The debt ceiling and current government shutdown impasse will be addressed by Democrats today, and Republican leaders are due to meet at the White House tomorrow.

The greenback has also been boosted by news that the Federal Reserve’s decision not to taper its massive bond buying programme last month was a close call. According to minutes from the meeting, most Fed leaders support reining in the easy money policy by the end of the year.

A positive decision by President Obama to push Janet Yellen as next leader of the Fed also appears to have eased the pressure on the dollar, because it is a decision at a time where few concrete decisions are being made.

Elsewhere, a drop in industrial output in the UK has put pressure on the pound. Sterling is currently trading at $1.5957 having earlier lost 0.8 per cent to $1.5917. The Australian dollar is holding firm ahead of payroll data at $0.9448.