Investing.com - The dollar traded lower against most major currencies on Monday though it trimmed earlier losses on budding hopes for U.S. policymakers to end a fiscal stalemate that has closed the government and is threatening to throw the world's largest economy into default.
The U.S. is due to hit its debt ceiling on Thursday, after which Washington won't be able to guarantee all of its obligations.
In U.S. trading on Monday, EUR/USD was up 0.25% at 1.3575.
Negotiations between the White House and congressional Republicans and Democrats remained in a deadlock on Monday, with both sides unable to agree on a short-term debt ceiling increase.
A government shutdown, also the product of congressional ability to agree on a spending package, was set to enter its third week this week.
However, on Monday afternoon, Senate Majority Leader Harry Reid, a Nevada Democrat, said lawmakers were getting closer to a deal that could steer the country away from default and reopen the federal government.
President Barack Obama as due to meet with lawmakers on Monday afternoon to discuss ways to end the stalemate, which also cushioned the dollar's losses, though the meeting was postponed reportedly to give Reid and the Senate's top Republican, Mitch McConnell, more time to craft a plan to end the deadlock.
While no details on whispers of an emerging deal, hopes for a last-minute accord that will avoid crisis still lifted the dollar from earlier lows.
Elsewhere, global finance ministers and central bank chiefs gathered in Washington for the annual meeting of the International Monetary Fund and World Bank, calling for urgent action to end the stalemate and avoid default, which could bruise global economic recovery.
IMF Managing Director Christine Lagarde said on Sunday that failure to raise the debt ceiling and fund the government has global policymakers worried.
“If there is that degree of disruption, that lack of certainty, that lack of trust in the U.S. signature, it would mean massive disruption the world over, and we would be at risk of tipping, yet again, into recession,” Lagarde said in an interview with NBC’S “Meet the Press” news program.
Meanwhile in Europe, data released on Monday showed that industrial production in the euro zone rose 1.0% in August, beating market calls for a 0.8% increase, which gave the euro support.
The greenback was down against the pound, with GBP/USD up 0.29% at 1.5992.
The dollar was down against the yen, with USD/JPY down 0.15% at 98.41, and down against the Swiss franc, with USD/CHF down 0.32% at 0.9092.
The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.04% at 1.0353, AUD/USD up 0.30% at 0.9494 and NZD/USD trading up 0.60% at 0.8372.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.17% at 80.35.
The U.S. is due to hit its debt ceiling on Thursday, after which Washington won't be able to guarantee all of its obligations.
In U.S. trading on Monday, EUR/USD was up 0.25% at 1.3575.
Negotiations between the White House and congressional Republicans and Democrats remained in a deadlock on Monday, with both sides unable to agree on a short-term debt ceiling increase.
A government shutdown, also the product of congressional ability to agree on a spending package, was set to enter its third week this week.
However, on Monday afternoon, Senate Majority Leader Harry Reid, a Nevada Democrat, said lawmakers were getting closer to a deal that could steer the country away from default and reopen the federal government.
President Barack Obama as due to meet with lawmakers on Monday afternoon to discuss ways to end the stalemate, which also cushioned the dollar's losses, though the meeting was postponed reportedly to give Reid and the Senate's top Republican, Mitch McConnell, more time to craft a plan to end the deadlock.
While no details on whispers of an emerging deal, hopes for a last-minute accord that will avoid crisis still lifted the dollar from earlier lows.
Elsewhere, global finance ministers and central bank chiefs gathered in Washington for the annual meeting of the International Monetary Fund and World Bank, calling for urgent action to end the stalemate and avoid default, which could bruise global economic recovery.
IMF Managing Director Christine Lagarde said on Sunday that failure to raise the debt ceiling and fund the government has global policymakers worried.
“If there is that degree of disruption, that lack of certainty, that lack of trust in the U.S. signature, it would mean massive disruption the world over, and we would be at risk of tipping, yet again, into recession,” Lagarde said in an interview with NBC’S “Meet the Press” news program.
Meanwhile in Europe, data released on Monday showed that industrial production in the euro zone rose 1.0% in August, beating market calls for a 0.8% increase, which gave the euro support.
The greenback was down against the pound, with GBP/USD up 0.29% at 1.5992.
The dollar was down against the yen, with USD/JPY down 0.15% at 98.41, and down against the Swiss franc, with USD/CHF down 0.32% at 0.9092.
The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.04% at 1.0353, AUD/USD up 0.30% at 0.9494 and NZD/USD trading up 0.60% at 0.8372.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.17% at 80.35.