With the U.S. budget stalemate keeping any potential gains for the U.S. Dollar limited, the greenback was only able to rise against the Japanese Yen, a result of speculation that the Japanese government is likely to implement additional corporate tax reform measures. According to Japanese media, those reforms which are intended to help better control Japanese public debt, include a drop in the existing tax rate and the imminent withdrawal of a temporary tax increase prior to the expected increase in sales tax to 8% from the current 5%. One currency strategist pointed out, however, that the rise in the USD/JPY pair could be attributed to the weakness and sell off of the Japanese Yen rather than any inherent strengthening of the greenback.
The USD/JPY pair traded at 99.12 Yen before settling back to 98.88 Yen, still a gain of 0.5% and moving away from the earlier struck 1-week trough of 98.27 Yen. The EUR/JPY pair traded at a session high of 133.91 Yen then drifted lower to 133.70, still a gain of 0.4%.
Dollar Index Crawls Higher
The U.S. Dollar Index traded 0.1% higher at 80.417 .DXY following Wednesday’s 0.3% loss to the recently struck 7-month low of 80.060 .DXY. The Dollar is failing to gain any traction as investors sit on the sideline and await some decision by the government as to a budget deal which would prevent the need for a government shutdown.