SINGAPORE- The dollar weakened broadly on Wednesday after US President Joe Biden and top lawmakers failed to break a deadlock on the debt ceiling crisis, though currency moves were marginal amid caution ahead of US inflation data later in the day.
Biden and House of Representatives Speaker Kevin McCarthy remained divided over raising the $31.4 trillion US debt limit following talks on Tuesday, with just weeks to go before the United States may be forced into an unprecedented default.
The two, however, agreed to further talks and committed their aides to daily. Biden, McCarthy and the three other top congressional leaders are set to meet again on Friday.
The greenback dipped slightly in Asia trade, while holding onto most of its gains from the previous session as nervousness over Wednesday’s US inflation data kept the safe-haven currency buoyant.
The euro rose 0.06 percent to $1.0966 while sterling slipped 0.04 percent to $1.2617.
The kiwi edged 0.08 percent higher to $0.6340.
“There has been a lot of attention lately on the debt ceiling issues,” said Carol Kong, a currency strategist at Commonwealth Bank of Australia (CBA). “I don’t think the issue will be resolved anytime soon. Typically, in the past, the issues usually get resolved very last minute.
“So that means there could be some more volatility in markets … and I think the dollar could weaken even further, as we have seen in the past.”
Against a basket of currencies, the US dollar index steadied at 101.64.
Economists polled by Reuters expect core consumer prices in the United States to rise 5.5 percent on a year-on-year basis for the month of April. – Reuters
