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Forex - USD/JPY drops as U.S. fiscal negotiations hit fresh snag

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Investing.com - " The dollar fell against the yen on Tuesday after the Senate suspended its negotiations to end a fiscal deadlock that is threatening to throw the country into default until the House of Representatives finds a way out of the impasse.

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 unless Congress agrees on a spending package.

In U.S. trading on Tuesday, USD/JPY was trading at 98.17, down 0.42%, up from a session low of 98.10 and off a high of 98.71.

The pair was likely to find support at 96.57, the low from Oct. 7, and resistance at 98.72, the high from Oct. 1.

Negotiations among lawmakers to agree on a way to fund the government and avoid possible defaults hit a snag on Tuesday after the Democratically-controlled Senate said it would stop working on a way out of the impasse until the Republican controlled House comes up with a proposal.

The news sent the dollar falling from gains posted earlier in the session, when both the Senate and the House had prepared roadmaps to end the crisis that were viewed by many as compatible.

The dollar failed to plunge amid sentiments that budget talks have hit a pothole but weren't dead in the water yet.

The yen, which has acted as a safe-haven currency during the U.S. deadlock that closed the federal government on Oct. 1, jumped up in afternoon trading.

Elsewhere, data released earlier revealed that an index of manufacturing activity in the New York region came in below expectations this month.

The Federal Reserve Bank of New York said that its general business conditions index fell to 1.52 for October from 6.29 in September. Analysts had expected a reading of 7.0.

The yen was up against the pound and up against the euro, with GBP/JPY down 0.26% and trading at 157.16 and EUR/JPY trading down 0.58% at 132.90.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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