Notches all-time lows against Swissie, Aussie and Singapore dollar
By Deborah Levine and William L. Watts, MarketWatch
NEW YORK (MarketWatch) — The U.S. dollar skidded to fresh all-time lows against its Australian, Singapore and Swiss counterparts Wednesday and hit a fresh post-intervention low against the Japanese yen before clawing back some of its losses.
The greenback, however, turned higher against the euro after a high-ranking German official threw cold water on last week’s rescue plan for Greece, helping the dollar index DXY +0.39% rise for the first day in three.
The dollar index, which tracks the U.S. unit’s performance against a basket of six other currencies, reached 73.709, up from 73.501 late Tuesday.
The euro EURUSD -0.69% slipped to $1.4449 from $1.4514 in late North American trading Tuesday. See real-time currency quotes and tools.
Against the yen, the dollar USDJPY -0.02% traded at ¥77.80. The dollar had slipped as low as ¥77.54, according to FactSet Research — a depth not seen since its all-time low below the ¥77 mark on March 17, and down from ¥77.90 late Tuesday.
Earlier against the Swiss franc USDCHF -0.16% , the dollar fell to an all-time low of 79.96 centimes on the EBS trading platform, compared with 80.10 centimes late Tuesday. Read story on the Swiss franc.
The dollar traded at 80.17 centimes in recent action, little changed on the day. There are 100 centimes in a Swiss franc.
Both the yen and the franc have long been considered the alternative currencies of choice when investors want to move into a safe haven and out of riskier assets. For its part, the dollar has played that role less frequently in recent months.
Safe-haven status in question
Currency traders kept a close eye on the prolonged standoff in Washington over raising the U.S. debt ceiling.
House Speaker John Boehner abruptly delayed a vote scheduled for Wednesday on a Republican plan to cut spending and raise the debt limits after a Congressional Budget Office analysis found it wouldn’t reduce spending by as much as Boehner had claimed.
Republicans began work on a rewrite of the legislation, which is opposed by the White House, rescheduling the House vote for Thursday. Boehner’s also facing a rebellion by conservatives saying the plan doesn’t go far enough towards reigning in future spending. Read story about Boehner’s plan.
“We continue to think that some sort of resolution will be reached before the end of next week” to avoid a technical default, said Jens Nordvig, head of G-10 foreign-exchange strategy at Nomura Securities. “But the dollar is nevertheless facing a new reality, where a downgrade of the U.S. sovereign to below AAA is increasingly likely.”
“Can the dollar remain the world’s dominant reserve currency when rating agencies and investors are starting to question the long-term credit quality of the U.S.?” he asked. “While there are no obvious alternatives to the dollar at this point, the dollar’s safe-haven status is clearly being called into question.”
