Forex - Dollar gains on rising hopes for end to U.S. fiscal impasse

Written By Unknown on Jumat, 11 Oktober 2013 | 08.10

Investing.com ג€' The dollar rose against most major currencies on Thursday after congressional Republicans offered to temporarily raise the U.S. debt ceiling and avoid defaults provided the White House engage in talks to end a fiscal impasse that has closed the U.S. government.

In U.S. trading on Thursday, EUR/USD was up 0.09% at 1.3536.

In the U.S. earlier, House Speaker John Boehner said his fellow Republicans would offer a temporary increase in the debt ceiling in exchange for dialogue with President Barack Obama on budget and deficit issues.

The White House said it would consider the offer and was awaiting details.

Hopes that talks will lead to an end to the government shutdown and avoid defaults while opening the door to broader fiscal reforms down the road firmed the greenback.

U.S. Treasury Secretary Jack Lew reiterated Thursday that the U.S. will reach its debt ceiling on Oct. 17 and warned that the political crisis is starting to hurt the economy. Lew was making his comments during testimony before the Senate finance committee.

Congressional inability to agree on a spending package closed the government on Oct. 1.

The dollar shrugged off a report by the Department of Labor showing that U.S. initial jobless claims rose to 374,000 last week, an increase of 66,000 from the previous week's unrevised figure of 308,000.

The number was high due to a computer glitch in California related to technology upgrades.

The greenback was up against the pound, with GBP/USD up 0.13% at 1.5977.

The Bank of Englandג€™s Monetary Policy Committee voted to leave its benchmark interest rate on hold at 0.5% and made no changes to its GBP375 billion quantitative easing program in a decision that was widely expected.

The dollar was up against the yen, with USD/JPY up 0.82% at 98.16, and up against the Swiss franc, with USD/CHF up 0.08% at 0.9108.

Meanwhile in Japan, the yen came under pressure as investors ditched safe-haven positions to go
long on equities despite hit-or-miss data.

Japan's Economic and Social Research Institute said that the country's core machinery orders rose 5.4% in September after coming in flat in August. Analysts expected a September increase of 2.0%.

In a separate report, the data revealed that the Japanese tertiary industry activity index rose by 0.7% last month after contracting 0.4% in August. Analysts expected the tertiary index to rise by 0.5% in September.

The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD flat at 1.0394, AUD/USD up 0.17% at 0.9460 and NZD/USD trading down 0.08% at 0.8292.

Data released on Thursday showed that Canadaג€™s new housing price index inched up by a seasonally adjusted 0.1% in August, below forecasts for a 0.3% gain.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.10% at 80.53.

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