Forex News: U.S. Dollar Drops On Debt Ceiling Deal Hopes

U.S. Dollar Drops On Debt Ceiling Deal Hopes

(RTTNews) - The U.S. dollar moved down against its major counterparts in the European session on Friday, following news that lawmakers are moving closer to a deal on raising the debt ceiling limit.

White House officials and Republican negotiators are inching closer to an agreement that would raise the debt limit for about two years and cap federal spending at the same level as fiscal 2023 for two years.

The deal has not been finalized, but the two sides are just divided on $70 billion in discretionary spending.

The breakthrough in debt ceiling negotiations pushed down the dollar index to 103.97.

The benchmark yield on the 10-year treasury note fell to 3.78 percent.

The greenback dropped to 1.2369 against the pound and 1.0744 against the euro, off its early highs of 1.2310 and 1.0717, respectively. The greenback may locate support around 1.25 against the pound and 1.085 against the euro.

The greenback fell to 139.49 against the yen and 0.6088 against the kiwi, from its early highs of 140.10 and 0.6048, respectively. The next possible support for the currency is seen around 138.00 against the yen and 0.62 against the kiwi.

The greenback edged down to 0.6531 against the aussie and 1.3612 against the loonie, reversing from its early 6-1/2-month high of 0.6490 and a 4-week high of 1.3654, respectively. Next key support for the currency is likely seen around 0.68 against the aussie and 1.34 against the loonie.

The greenback was down against the franc, at a 2-day low of 0.9018. If it drops further, it may find support around the 0.88 area.

Looking ahead, Canada preliminary wholesale sales data for April and budget balance report for March, U.S. durable goods orders for April, personal income and spending data for April, U.S. University of Michigan consumer sentiment index for May and U.S. Baker Hughes weekly oil rig count data are slated for release in the New York session.

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