The U.S. Dollar steadily gained momentum and moved higher during the Asian trading session as signs that Washington’s political stalemate could be on the verge of breaking apart is giving investors some much needed hope that the impending debt default could be averted. One senior currency analyst in Toyo says that with the deadlock situation improving the dollar could be poised to recover, provided these problems are fixed. Later today, leadership from the Republican Party will meet with President Obama in the White House to discuss common ground, and even the possibility of a temporary increase in the debt ceiling to allow for wider budget negotiations.
As reported at 10:31 (JST) in Tokyo, the U.S. Dollar Index clawed back to 80.47 .DXY, moving away from last week’s 8-month trough of 79. 627. DXY. The EUR/USD pair was trading at $1.3498, recovering from a 0.35% drop in the overnight hours. The USD/JPY pair gained 0.4% to trade at 97.74 Yen, almost 120 pips higher than the 2-month trough struck on Tuesday.
Frontrunner Janet Gets the Nod for Fed Job
The greenback also got some support from the news that President Obama intended to appoint Janet Yellen to succeed current Federal Reserve chief Ben Bernanke; Yellen has long been the front runner for the position and is currently second in command at the Fed. Markets see her as the best choice to slowly and soundly ease back on the QE throttle.