Dollar Falls Versus Euro, Yen Amid Debt Ceiling Impasse

Bloomberg (14/10) -- The dollar slipped for a second day versus the euro as talks between President Barack Obama and House Republicans hit an impasse and U.S. senators from both parties struggled to draft an accord that averts a U.S. default.The yen advanced versus the greenback for the first time in five days after Obama reiterated he will negotiate on the budget after the debt ceiling is raised and a partial government shutdown ends. The U.S.’s borrowing authority lapses on Oct. 17. The euro gained before a report forecast to show industrial production in the region rebounded in August. The Singapore dollar held a two-week gain after the central bank decided to retain the currency’s “modest and gradual” appreciation.“Given the fiscal shenanigans, we could go through several months of dull data, especially if we get just a short-term fix,” said Greg Gibbs, a Singapore-based senior currency strategist at Royal Bank of Scotland Group Plc. “The euro could maybe get up toward $1.40 on the basis that the market will be looking for an alternative to the dollar and a recovery is occurring modestly in Europe.”The dollar weakened 0.2 percent to $1.3565 per euro as of 6:40 a.m. in London after touching an eight-month low of $1.3646 on Oct. 3. It fell 0.3 percent to 98.25 yen. Japan’s currency rose 0.2 percent to 133.27 per euro.Democratic lawmakers warned over the weekend that a lack of movement may have an effect on financial markets. U.S. stock trading will take place on the federal Columbus Day holiday today. Bond markets will be closed. Japan’s markets are closed today for a holiday.Standard & Poor’s 500 Index futures signaled equities will fall in the U.S. and International Monetary Fund Managing Director Christine Lagarde said the congressional deadlock is threatening the U.S. and world economies.