Investing.com - The dollar slid lower against the other major currencies on Monday as the risk of a possible U.S. sovereign debt default weighed after weekend talks in Washington failed to reach a deal on raising the debt ceiling.
During European late morning trade, the dollar was weaker against the yen, with USD/JPY down 0.30% to 98.25.
Negotiations between U.S. President Barack Obama and House Republicans broke down over the weekend, fuelling concerns that a deal to raise the government borrowing limit would not be struck ahead of Thursday’s deadline to avert an unprecedented U.S. sovereign debt default.
World finance ministers and central bank heads in Washington for the annual meeting of the International Monetary Fund and World Bank over the weekend called for “urgent action” to break the deadlock, warning of the negative impact on the global economic recovery.
The euro pushed higher against the dollar, with EUR/USD rising 0.17% to 1.3562.
In the euro zone, data on Monday showed that industrial production rose 1% in August, coming in above expectations for a 0.8% increase.
The dollar extended losses against the pound and the Swiss franc, with GBP/USD climbing 0.22% to 1.5980 and USD/CHF down 0.20% to 0.9103.
Elsewhere, the greenback lower against its Australian, New Zealand and Canadian counterparts, with AUD/USD edging up 0.12% to 0.9477, NZD/USD up 0.62% to 0.8373 and USD/CAD slipping 0.15% to trade at 1.0342.
The growth linked Australian dollar came under pressure earlier after Chinese trade data over the weekend showed that exports unexpectedly slowed in September, sparking renewed concerns over the outlook for global demand.
Meanwhile, data released on Monday showed that home loans in Australia fell 3.9% in August, more than forecasts for a 2.5% decline.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, slid 0.13% to 80.39.
