NEW YORK CITY: The dollar was mixed against other major currencies Thursday, as foreign exchange traders reacted cautiously to signs of progress in US budget talks.
Near 2230 GMT, the euro bought $1.3526, up slightly from Wednesday's level of $1.3521.
The dollar advanced against the Japanese yen, trading at 97.91 compared with 97.33.
It traded slightly lower against the British pound and edged higher against the Swiss franc.
The euro rose to 132.58 yen from 131.61 yen.
US equity markets surged on Thursday's news that Republican leaders proposed a six-week extension of US borrowing authority, which would remove the near-term threat of a US debt default.
The dollar has shown weakness in recent weeks amid concerns over the economic drag of the partial government shutdown and the threat of a default.
Added to that are expectations that the budget impasse removes the chance for the US Federal Reserve to engage in a dollar-strengthening move to scale back a monetary stimulus program.
But compared with equity traders, "currency traders don't feel as enthusiastic because they believe the short-term reprieve does not reduce the risk of owning US assets," analyst Kathy Lien said of the latest proposal to end the impasse.
The proposal floated Thursday means "the government will be kicking the can down the road, leaving US debt troubles to cripple the markets a month forward," said Lien, of BK Asset Management.
David Song, currency analyst at DailyFX, also cited the risks of a continued stalemate.
"The dollar remains at risk of facing further weakness over the near to medium-term as the Fed retains its wait-and-see approach," he said
Among other currencies, the British pound traded at $1.5977, up from $1.5954 Wednesday.
The dollar advanced to 0.9104 Swiss franc from 0.9100.
Comments
Comments are closed.