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Forex - Dollar remains down amid deadlock on U.S. debt deal

Published 07/26/2011, 08:10 AM
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Investing.com – The U.S. dollar remained weaker against all of its major counterparts on Tuesday, as talks aimed at lifting the U.S. debt ceiling remained deadlocked after U.S. President Barack Obama give no indications of a breakthrough.

During European afternoon trade, the greenback was down against the euro, with EUR/USD climbing 0.74% to hit 1.4492.

On Monday, President Obama warned that failure to increase the U.S. borrowing limit would severely damage the economy and called on Congress to compromise, in order to avert a "reckless and irresponsible" national default ahead of the August 2 deadline.

The greenback was also down against the pound, with GBP/USD advancing 0.75% to hit 1.6398.

Earlier in the day, official data showed that the U.K. economy grew by 0.2% as expected in the second quarter.

Elsewhere, the greenback was trading close to a four-month trough against the yen and a record low against the Swiss franc, with USD/JPY shedding 0.26% to hit 78.07 and USD/CHF dropping 0.34% to hit 0.8032.

Japan’s Finance Minister Yoshihiko Noda repeated earlier that recent currency moves were one-sided and that he was closely watching market developments.

In addition, the greenback was weaker against its Canadian, Australian and New Zealand counterparts, with USD/CAD shedding 0.62% to hit a three-and-a-half-year low of 0.9414, AUD/USD jumping 1.05% to hit 1.0957 and NZD/USD rallying 1.08% to hit a post-float high of 0.8732.

Earlier Tuesday, official data showed that New Zealand’s trade surplus narrowed in June as exports fell to a five-month low.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.67%.

Later in the day, the U.S. was to publish government data on new home sales, as well as data on consumer confidence and house price inflation.

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