Investing.com - The dollar dropped to five-week lows against the yen on Wednesday as market sentiment was hit by concerns over a partial shutdown in the U.S. government, amid political deadlock over the federal budget.
During European late morning trade, the dollar fell to the lowest since late August against the yen, with USD/JPY down 0.58% to 97.45.
The dollar remained under pressure amid fears that the U.S. government shutdown would curb the economic recovery and prompt the Federal Reserve to maintain its stimulus program for longer.
Last month the U.S. central bank took markets by surprise with a decision to keep its stimulus program on track, saying it wanted to see more evidence of a sustained economic recovery before tapering.
Markets were also mulling over how the political deadlock in Washington will impact on negotiations to raise the U.S. debt ceiling, which the U.S. Treasury Department has estimated will be reached by October 17.
Elsewhere, the euro was almost unchanged against the dollar, with EUR/USD inching up 0.03% to 1.3530.
Sentiment on the single currency remained fragile as Italian Prime Minister Enrico Letta faced a vote of confidence in parliament, after Silvio Berlusconi pulled his ministers out of the coalition government on Saturday.
Investors were also looking ahead to the outcome of the European Central Bank’s latest policy meeting and press conference with President Mario Draghi later Wednesday.
The dollar was trading close to nine-month lows against the pound, with GBP/USD rising 0.14% to 1.6218.
Data released on Wednesday showed that activity in the U.K. construction sector slowed slightly in September, but remained close to August’s almost six-year high.
The Markit U.K. construction purchasing managers' index ticked down to 58.9 in September from 59.1 in August. Economists had forecast a reading of 59.2.
The dollar re-approached Tuesday’s 19-month lows against the Swiss franc, with USD/CHF slipping 0.14% to 0.9043.
Elsewhere, the greenback was broadly higher against its Australian, New Zealand and Canadian counterparts, with AUD/USD down 0.55% to 0.9345, NZD/USD losing 0.51% to trade at 0.8233 and USD/CAD climbing 0.20% to 1.0346.
The Aussie weakened after data released on Wednesday showed that the Australian trade deficit was larger than forecast in August and a separate report showed that building approvals fell more-than-expected.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, edged down 0.06% to 80.22.
During European late morning trade, the dollar fell to the lowest since late August against the yen, with USD/JPY down 0.58% to 97.45.
The dollar remained under pressure amid fears that the U.S. government shutdown would curb the economic recovery and prompt the Federal Reserve to maintain its stimulus program for longer.
Last month the U.S. central bank took markets by surprise with a decision to keep its stimulus program on track, saying it wanted to see more evidence of a sustained economic recovery before tapering.
Markets were also mulling over how the political deadlock in Washington will impact on negotiations to raise the U.S. debt ceiling, which the U.S. Treasury Department has estimated will be reached by October 17.
Elsewhere, the euro was almost unchanged against the dollar, with EUR/USD inching up 0.03% to 1.3530.
Sentiment on the single currency remained fragile as Italian Prime Minister Enrico Letta faced a vote of confidence in parliament, after Silvio Berlusconi pulled his ministers out of the coalition government on Saturday.
Investors were also looking ahead to the outcome of the European Central Bank’s latest policy meeting and press conference with President Mario Draghi later Wednesday.
The dollar was trading close to nine-month lows against the pound, with GBP/USD rising 0.14% to 1.6218.
Data released on Wednesday showed that activity in the U.K. construction sector slowed slightly in September, but remained close to August’s almost six-year high.
The Markit U.K. construction purchasing managers' index ticked down to 58.9 in September from 59.1 in August. Economists had forecast a reading of 59.2.
The dollar re-approached Tuesday’s 19-month lows against the Swiss franc, with USD/CHF slipping 0.14% to 0.9043.
Elsewhere, the greenback was broadly higher against its Australian, New Zealand and Canadian counterparts, with AUD/USD down 0.55% to 0.9345, NZD/USD losing 0.51% to trade at 0.8233 and USD/CAD climbing 0.20% to 1.0346.
The Aussie weakened after data released on Wednesday showed that the Australian trade deficit was larger than forecast in August and a separate report showed that building approvals fell more-than-expected.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, edged down 0.06% to 80.22.