Dollar rises as US shutdown continues


dollar greenThe Australian dollar is higher with the greenback falling against most currencies as it looks like the American government shutdown will continue for a few more days.

At 0700 AEST on Thursday, the local unit was trading at 93.85 US cents, up from 93.52 cents on Wednesday.

Since 1700 AEST on Thursday, the Australian dollar has traded between 93.34 and 94.12 US cents.

Large parts of the US government have been closed for almost two days after Congress failed to pass budget legislation by the end of the American financial year.

President Barack Obama has called Republican and Democratic leaders to a White House meeting to urge them to pass a temporary spending bill without any conditions attached to the legislation.

Westpac NZ senior market strategist Imre Speizer said the market had become pessimistic about the likelihood of a quick budget resolution.

“The shutdown is weighing on the US dollar, there is also concern about the US debt ceiling that will be hit in the middle of October,” he said from Auckland.

“(Also) there were some weak payrolls data in the states overnight that weighed on the US dollar.”

Data from payrolls firm ADP show the US private sector added 166,000 jobs to the economy in September, fewer than the 180,000 economists predicted.

Speizer said the figures take on particular significance because the non-farm payrolls employment data from the US Labor Department won’t be released on Friday because of the government shutdown.

“That secondary payrolls report suddenly becomes much more important so the market took a lot of notice of that,” he said.

Speizer said he expects the Australian dollar to trade in a range between 93.40 and 94.35 cents on Thursday.


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