The US Dollar was broadly weaker on Tuesday afternoon after policy makers in the US failed to agree on a budget for the next fiscal year. The deadlock between the Republicans and Democrats in Congress wasn’t broken as both sides stubbornly refused to back down over the controversial ObamaCare.
As Americans awoke on Tuesday morning up to a million federal government workers were told to stay at home as the machinations of the world’s only superpower ground to halt in the wake of political bickering.
As a consequence investors turned to the safe haven currencies. Against the Swiss Franc the Dollar tumbled to a 19-month low, whilst against Sterling it fell to its lowest-level in eight-months. With uncertainty as to the impacts of the federal government closure traders opted to sell their Dollars as worries grow that the shutdown will curb the country’s economic recovery and cause the Federal Reserve to maintain its quantitative easing programme for longer.
“The market is anticipating that a shutdown means the Fed will also maintain its easy policy stance for longer because of the risks to the US economy. We are seeing some strength in the European countries and a bit of weakness in the US Dollar” said Gregg Gibbs, senior currency strategist at Royal Bank of Scotland.
As the session progressed the Dollar received another knock after the latest Markit Manufacturing PMI data for September came in weaker than the previous month. The figure came in at 52.8, down from Augusts’ level of 53.10. In comparison the Institute for Supply Managements Manufacturing Index increased to 56.2 in September beating economist forecasts for a fall to 55.
US Dollar (USD) Current Exchange Rates
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6158
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7371
The US Dollar/ Canadian Dollar Exchange Rate is currently in the region of: 1.0300
The US Dollar/ Australian Dollar Exchange Rate is currently in the region of: 1.0616
The US Dollar/ New Zealand Dollar Exchange Rate is currently in the region of: 1.2027
The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 98.0052
The US Dollar/ South African Rand Exchange Rate is currently in the region of: 9.9818
The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.6236
The Euro/ US Dollar Exchange Rate is currently in the region of: 1.3565
(Correct as of 15:15 pm GMT)
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