Dollar on defensive after dovish Powell, debt ceiling setback
Timilehin Adejumobi
1 min read
The dollar nursed losses against the yen and euro on Monday following a surprise breakdown in U.S. debt ceiling negotiations and after Federal Reserve chair Jerome Powell indicated a preference to slow rate hikes.
The greenback slipped 0.15% to 137.715 yen at the start of the week, having snapped a six-day winning streak on Friday and pulling back from a six-month peak.
The euro added 0.14% to $1.0822, extending Friday’s advance, when it bounced off a seven-week low.
Investors now await a key meeting between U.S. President Joe Biden and House Republican Speaker Kevin McCarthy to discuss the debt ceiling on Monday.
Negotiations between the two sides broke off suddenly on Friday with Republican negotiators walking out of the meeting. Although talks eventually resumed, neither side cited any progress, knocking the dollar lower.
Many currency analysts say brinkmanship is to be expected heading toward the ostensible “X-date” in early June, when the Treasury is likely to run out of money.
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