Tue, 06 Jun 2023

U.S. dollar steady as debt ceiling talks resume

23 May 2023, 07:30 GMT+10

NEW YORK, May 22 (Xinhua) -- The U.S. dollar showed little change on Monday as debt ceiling talks between U.S. President Joe Biden and House Speaker Kevin McCarthy are set to resume.

The dollar index, which measures the greenback against six major peers, rose 0.0047 percent at 103.1972 in late trading.

Biden and McCarthy are scheduled to meet at the White House at a pivotal moment as Washington works to strike a budget compromise and raise the nation's borrowing limit in time to avert a devastating federal default.

Democrats and Republicans are still far apart on a deal to raise the debt ceiling, and it is unclear if a deal can be reached before the Treasury Department runs out of cash as early as June 1.

St. Louis Fed President James Bullard said Monday the Fed may need to raise the benchmark interest rate by another 50 basis points this year, which drove up the U.S. dollar in the morning.

Moreover, Federal Reserve Bank of Minneapolis President Neel Kashkari said it's a "close call" for him if the central bank should raise interest rates next month or pause while it monitors the outlook for inflation, while San Francisco Fed President Mary Daly said it's too soon to say whether the U.S. central bank will raise rates at the June 13-14 policy meeting.

"The U.S. dollar is likely to remain steady in the coming days as investors await the outcome of the debt ceiling talks," said Michael Hewson, chief market analyst at CMC Markets.

In late New York trading, the euro rose to 1.0819 dollars from 1.0807 dollars in the previous session, and the British pound decreased to 1.2442 dollars from 1.2448 U.S. dollars in the previous session.

The U.S. dollar bought 138.5500 Japanese yen, higher than 138.0760 Japanese yen of the previous session. The U.S. dollar was down to 0.8970 Swiss francs from 0.8998 Swiss francs, and it fell to 1.3507 Canadian dollars from 1.3509 Canadian dollars. The U.S. dollar rose to 10.5523 Swedish Krona from 10.5292 Swedish Krona.

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