Investing.com - The dollar gained ground against the other main currencies on Tuesday, buoyed up by hopes that politicians in Washington are close to a deal to raise the government borrowing limit in time to avert a default.
During European late morning trade, the dollar was steady at two-week highs against the yen, with USD/JPY edging up 0.04% to 98.61.
The dollar found support after Senate Majority Leader Harry Reid said Monday that “tremendous progress” had been made towards a deal to raise the U.S. debt ceiling and reopen the federal government, fuelling hopes that a compromise can be reached.
If an agreement to raise the government borrowing limit is not struck ahead of Thursday’s deadline, the U.S. will face an unprecedented sovereign debt default.
However, any potential deal will still have to be approved by the House of Representatives, where Speaker John Boehner would have to decide whether to allow a vote or demand federal spending cuts.
The euro was lower against the dollar, with EUR/USD down 0.48% to 1.3495.
The single currency shrugged off data showing that German economic sentiment improved more-than-expected in October, rising to the highest level since April 2010.
The ZEW Centre for Economic Research said that its index of German economic sentiment rose by 3.2 points to hit 52.8 in October from September’s reading of 49.6. Analysts had expected an unchanged reading.
The dollar was also higher against the pound, with GBP/USD falling 0.38% to 1.5921.
Data released on Tuesday showed that consumer price inflation in the U.K. accelerated 2.7% on a year-over-year basis last month, unchanged from August.
Analysts had expected consumer price inflation to tick down to 2.6%.
U.K. consumer price inflation rose 0.4% in September from a month earlier, above expectations for a 0.3% increase.
The dollar rose to one-month highs against the Swiss franc, with USD/CHF advancing 0.78% to 0.9175.
Elsewhere, the greenback was mixed to lower against its Australian, New Zealand and Canadian counterparts, with AUD/USD climbing 0.36% to 0.9522, NZD/USD up 0.37% to 0.8388 and USD/CAD edging up 0.07% to trade at 10360.
The Australian dollar strengthened after minutes from the Reserve Bank of Australia's October meeting indicated that the bank is in no hurry to cut interest rates further, saying that previous rate cuts are still affecting the nation's economy.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.47% to 80.77.
The U.S. was to release a report on manufacturing activity in the Empire state later in the trading day.
During European late morning trade, the dollar was steady at two-week highs against the yen, with USD/JPY edging up 0.04% to 98.61.
The dollar found support after Senate Majority Leader Harry Reid said Monday that “tremendous progress” had been made towards a deal to raise the U.S. debt ceiling and reopen the federal government, fuelling hopes that a compromise can be reached.
If an agreement to raise the government borrowing limit is not struck ahead of Thursday’s deadline, the U.S. will face an unprecedented sovereign debt default.
However, any potential deal will still have to be approved by the House of Representatives, where Speaker John Boehner would have to decide whether to allow a vote or demand federal spending cuts.
The euro was lower against the dollar, with EUR/USD down 0.48% to 1.3495.
The single currency shrugged off data showing that German economic sentiment improved more-than-expected in October, rising to the highest level since April 2010.
The ZEW Centre for Economic Research said that its index of German economic sentiment rose by 3.2 points to hit 52.8 in October from September’s reading of 49.6. Analysts had expected an unchanged reading.
The dollar was also higher against the pound, with GBP/USD falling 0.38% to 1.5921.
Data released on Tuesday showed that consumer price inflation in the U.K. accelerated 2.7% on a year-over-year basis last month, unchanged from August.
Analysts had expected consumer price inflation to tick down to 2.6%.
U.K. consumer price inflation rose 0.4% in September from a month earlier, above expectations for a 0.3% increase.
The dollar rose to one-month highs against the Swiss franc, with USD/CHF advancing 0.78% to 0.9175.
Elsewhere, the greenback was mixed to lower against its Australian, New Zealand and Canadian counterparts, with AUD/USD climbing 0.36% to 0.9522, NZD/USD up 0.37% to 0.8388 and USD/CAD edging up 0.07% to trade at 10360.
The Australian dollar strengthened after minutes from the Reserve Bank of Australia's October meeting indicated that the bank is in no hurry to cut interest rates further, saying that previous rate cuts are still affecting the nation's economy.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.47% to 80.77.
The U.S. was to release a report on manufacturing activity in the Empire state later in the trading day.