Dollar Holds Drop as Shutdown Looms, Fed Stimulus Damps Demand

The dollar remained lower after a two-day slide versus the yen as the U.S. government moves closer to a shutdown with lawmakers wrangling over the debt limit.

The greenback held losses against most of its 16 major counterparts before Federal Reserve Bank of Cleveland President Sandra Pianalto speaks today, after New York Fed President William C. Dudley said yesterday the economy still needs support. The euro remained lower after its biggest one-day drop in two weeks ahead of a speech by European Central Bank Governing Council member Ewald Nowotny.

The dollar was little changed at 98.71 yen as of 10:05 a.m. in Tokyo, after falling 0.6 percent in the previous two days. It fetched $1.3495 per euro after rising 0.2 percent to $1.3493 yesterday, the biggest gain since Sept. 5. Europe’s shared currency bought 133.21 yen from yesterday, when it declined 0.7 percent to 133.37 yen.

The dollar has fallen 2 percent against the euro this month and is set for a 3.6 percent quarterly drop, the most since the period through March 2011. The greenback has risen 0.6 percent since Aug. 31 versus the yen, paring its decline this quarter to 0.4 percent.

(Source: Bloomberg)