Forex News: U.S. Debt Ceiling Deadlock Boosts Dollar

U.S. Debt Ceiling Deadlock Boosts Dollar

(RTTNews) - The U.S. dollar was higher against its major counterparts in the European session on Wednesday, as a deadlock over raising the government's borrowing limit lifted the demand of the safe-haven currency.

President Joe Biden cut short his planned Asia trip and will return to the U.S. on Sunday as the clock ticks towards the deadline.

House Speaker Kevin McCarthy said there is "a lot of work to do" to reach a deal for raising the debt ceiling.

Hawkish comments from Fed officials reduced expectations of imminent reduction in interest rates.

In an interview with Bloomberg on Tuesday, Chicago Fed President Austan Goolsbee said it was "far too premature to be talking about rate cuts."

The greenback climbed to a 3-week high of 1.2421 against the pound and a 5-week high of 0.9007 against the franc, off its early lows of 1.2493 and 0.8949, respectively. The greenback is likely to find resistance around 1.21 against the pound and 0.92 against the franc.

The greenback appreciated to fresh 2-week highs of 137.17 against the yen and 0.6628 against the aussie, from its early lows of 136.30 and 0.6670, respectively. The greenback is poised to find resistance around 139.00 against the yen and 0.63 against the aussie.

The greenback firmed to a 1-1/2-month high of 1.0820 against the euro and a 2-day high of 1.3535 against the loonie, up from its prior lows of 1.0873 and 1.3462, respectively. Next near term resistance for the greenback is likely seen around 1.06 against the euro and 1.38 against the loonie.

In contrast, the greenback eased against the kiwi, touching 0.6253. The greenback is seen finding support around the 0.645 level.

U.S. building permits and housing starts for April are set for release in the New York session.

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