U.S. dollar strengthens amid debt ceiling uncertainties

Xinhua
24 May 2023, 07:44 GMT+10

NEW YORK, May 23 (Xinhua) -- The U.S. dollar retained the upper hand on Tuesday as anxiety over U.S. debt ceiling talks weighed on investors' risk appetite.

The dollar index, which measures the greenback against six major peers, increased 0.28 percent to 103.4864 in late trading.

The lack of resolution regarding the U.S. debt ceiling is still the key support of the U.S. dollar. "I need you all to hang with me on the debt limit, we are nowhere near a deal yet," U.S. House Speaker Kevin McCarthy told House Republicans on Tuesday. Republican debt ceiling negotiator Garret Graves also reportedly said that things were not going well over the talks.

The U.S. dollar was higher against most of the majors on Tuesday, as investors remained concerned about the U.S. debt ceiling standoff, noted Kenny Fisher, market analyst with online forex trading platform and broker OANDA.

DailyFX Strategist Diego Colman said the U.S. business activity and the labor market have held up remarkably well over the past few months despite numerous headwinds, including the banking sector turmoil that erupted in March.

"There is reason to believe that the U.S. dollar could retain the upper hand for a little bit longer," said Colman.

On a similar note, Sevens Report Research founder Tom Essaye said that "from a technical perspective, there are signs that a potential bottom for the dollar has been formed."

In late New York trading, the euro fell to 1.0775 dollars from 1.0819 dollars in the previous session, and the British pound decreased to 1.2417 dollars from 1.2442 U.S. dollars in the previous session.

The U.S. dollar bought 138.5240 Japanese yen, lower than 138.5500 Japanese yen of the previous session. The U.S. dollar increased to 0.9013 Swiss francs from 0.8970 Swiss francs, and it decreased to 1.3505 Canadian dollars from 1.3507 Canadian dollars. The U.S. dollar increased to 10.6239 Swedish Krona from 10.5523 Swedish Krona.

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