USD/JPY near 97.70 as Shutdown Takes Toll

The dollar rebounded against the yen but struggled close to an eight-month low against a basket of rivals on Thursday as the U.S. government shutdown dragged on and positive developments in Italian politics helped lift the euro.

President Barack Obama met with Republican and Democratic leaders in Congress on Wednesday, but a solution seemed unlikely as both sides dug in for what could be a long stalemate.

The standoff comes a few weeks ahead of the next political battle to raise the federal government’s borrowing limit. Failure to do this could result in a worst-case scenario of an historic U.S. debt default.


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