The dollar edged up in Asian trade on Friday as dealers turn their attention from the US debt showdown to the future of the Federal Reserve’s stimulus program.
The greenback bought 98.04 yen Friday afternoon in Tokyo, a tad up from 97.91 yen in New York but well below the mid-98 yen range in Tokyo earlier Thursday.
The euro bought $1.3676 and 134.09 yen compared with $1.3677 and 133.92 yen.
While markets breathed a sigh of relief that US lawmakers on Wednesday agreed a deal to reopen the government and avert a default, the temporary nature of the fix weighed on sentiment.
The bill restarts government operations until January 15 and raises the debt ceiling until February 7, giving lawmakers time to draw up a longer term deal.
“Despite a US deal being done and a crisis averted (for now), investors are now wondering whether to expect another government shutdown and another round of deadline-day deals early next year,” said National Australia Bank in a statement. “There’s been a big move in the US dollar overnight as markets now start to reassess the Fed outlook.”
The Fed would likely put off winding down its stimulus scheme until early next year owing to the impact of the shutdown on the economy, the statement said.
Data Friday showing China’s economic growth accelerated in the third quarter — expanding 7.8 percent from a year earlier — helped soothe fears over sharper slowdown in the global economy.
The Australian dollar, which soared to a four-month high against the dollar this week, bought 96.25 US cents Friday afternoon against 95.36 cents Thursday.
Reserve Bank of Australia Governor Glenn Stevens told a business audience in Sydney that he hoped the currency would take a breather.
The Aussie dollar’s strength has fuelled concerns it could snuff out export growth in the non–mining sector of the economy, which remains weak.
The US dollar weakened against most other Asia-Pacific currencies.
It slipped to 43.09 Philippine pesos from 43.12 pesos on Thursday, to 61.03 Indian rupees from 61.60 rupees, to 1,061.05 South Korean won from 1,063.80 won, to 31.03 Thai baht from 31.13 baht and to Sg$1.2384 from Sg$1.2439.
But it rose to 11,091 Indonesian rupiah from 10,942 rupiah while it held steady at Tw$29.38.
The Chinese yuan edged down to 16.06 yen from 16.14 yen.
