Investing.com - The dollar weakened against most major currencies on Thursday after investors looked beyond a fiscal impasse in the U.S. and more towards its effects on the economy, fearing the deadlock may prompt the Federal Reserve to keep monetary stimulus programs in place.
In U.S. trading on Thursday, EUR/USD was up 0.03% at 1.3680.
While markets breathed a sigh of relief after the U.S. Congress passed a bill to reopen the government and raise the debt ceiling this week, concerns continued to persist that the Federal Reserve may delay plans to taper its stimulus program until early 2014.
The Fed is currently buying USD85 billion in Treasury holdings and mortgage debt a month to boost the economy, a monetary policy tool known as quantitative easing that drives down interest rates to spur recovery, weakening the dollar in the process.
Prior to the fiscal showdown in Washington, markets were expecting the Fed to begin tapering the pace of its asset purchases in late October or early December, though many have pushed back estimates for a start date to early 2014, possibly after current Fed Chair Ben Bernanke steps down on Jan. 31.
Separately, investors ditched the safe-haven greenback for risk-on asset classes after official data showed that China's gross domestic product grew by 7.8% in the third quarter, in line with expectations and up from 7.5% in the three months to June.
The data eased concerns over the strength of the recovery in the world's second-largest economy, and sparked demand for risk-on asset classes though bottom fishing trimmed the greenback's losses.
The greenback was down against the pound, with GBP/USD up 0.02% at 1.6165.
The dollar was down against the yen, with USD/JPY down 0.05% at 97.87, and down against the Swiss franc, with USD/CHF down 0.02% at 0.9022.
The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.01% at 1.0293, AUD/USD up 0.37% at 0.9670 and NZD/USD trading up 0.03% at 0.8488.
In Canada, official data showed that core consumer price inflation, which is stripped of volatile items, remained unchanged at 1.3% in September, defying expectations for a downtick to 1.0%.
The country's broader consumer price inflation rose to 0.2% last month from a flat reading in August, above expectations for a rise to 0.1%.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.03% at 79.72.
In U.S. trading on Thursday, EUR/USD was up 0.03% at 1.3680.
While markets breathed a sigh of relief after the U.S. Congress passed a bill to reopen the government and raise the debt ceiling this week, concerns continued to persist that the Federal Reserve may delay plans to taper its stimulus program until early 2014.
The Fed is currently buying USD85 billion in Treasury holdings and mortgage debt a month to boost the economy, a monetary policy tool known as quantitative easing that drives down interest rates to spur recovery, weakening the dollar in the process.
Prior to the fiscal showdown in Washington, markets were expecting the Fed to begin tapering the pace of its asset purchases in late October or early December, though many have pushed back estimates for a start date to early 2014, possibly after current Fed Chair Ben Bernanke steps down on Jan. 31.
Separately, investors ditched the safe-haven greenback for risk-on asset classes after official data showed that China's gross domestic product grew by 7.8% in the third quarter, in line with expectations and up from 7.5% in the three months to June.
The data eased concerns over the strength of the recovery in the world's second-largest economy, and sparked demand for risk-on asset classes though bottom fishing trimmed the greenback's losses.
The greenback was down against the pound, with GBP/USD up 0.02% at 1.6165.
The dollar was down against the yen, with USD/JPY down 0.05% at 97.87, and down against the Swiss franc, with USD/CHF down 0.02% at 0.9022.
The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.01% at 1.0293, AUD/USD up 0.37% at 0.9670 and NZD/USD trading up 0.03% at 0.8488.
In Canada, official data showed that core consumer price inflation, which is stripped of volatile items, remained unchanged at 1.3% in September, defying expectations for a downtick to 1.0%.
The country's broader consumer price inflation rose to 0.2% last month from a flat reading in August, above expectations for a rise to 0.1%.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.03% at 79.72.