15 minutes
NEW YORK: The US dollar strengthened against a basket of other currencies on Thursday amid continuous concerns over possible US debt default and upbeat macroeconomic and labour market data, reported Xinhua.
The dollar index, which measures the greenback against six major peers, rose 0.34 per cent to 104.2424 in late trading.
US House lawmakers are leaving Washington for the long holiday weekend on Thursday without a deal to raise the debt ceiling, but the two sides are just 70 billion US dollars apart on a total figure that would be well over 1 trillion US dollars, according to a Reuters source.
“The failure to reach a deal to raise or suspend the debt limit by the x-date would be a negative signal of the broader governance and willingness of the US to honour its obligations in a timely fashion, which would be unlikely to be consistent with a ‘AAA’ rating,“ Fitch said.
Standard Chartered head of North American macro strategy Steve Englander said if the United States were going to default, “it would become dollar positive very quickly.”
Moody’s Investor Service believes that the US dollar’s dominance in international trade and finance will persist for decades despite new challenges. “The greatest near-term danger to the dollar’s position stems from the risk of confidence-sapping policy mistakes by the US authorities themselves, like a US default on its debt for example,“ Moody’s analysts wrote.
Moreover, the US labour market continues to show signs of improvement as applications for first-time unemployment benefits beat market expectations for the second straight week.
The number of Americans filing for jobless claims for the week ending May 20 rose to 229,000 from 225,000 the week before but lower than 248,000 of forecast consensus, the US Labor Department reported Thursday.
In addition, US economic growth rate in the first quarter was revised to 1.3 per cent, up from 1.1 per cent in the initial estimate.
In late New York trading, the euro was down to 1.0722 dollars from 1.0750 dollars in the previous session, and the British pound was down to 1.2318 dollars from 1.2361 US dollars in the previous session. The US dollar bought 139.9710 Japanese yen, higher than 139.1400 Japanese yen of the previous session. The US dollar increased to 0.9063 Swiss francs from 0.9051 Swiss francs, and it rose to 1.3638 Canadian dollars from 1.3598 Canadian dollars. The US dollar increased to 10.8328 Swedish Krona from 10.7255 Swedish Krona. -Bernama
