The dollar sank to its lowest level in eight weeks against the yen amid concern U.S. lawmakers will fail to reach an agreement to raise the federal debt ceiling and keep the nation from defaulting.
Switzerland’s franc gained versus the greenback after Treasury Secretary Jacob J. Lew said yesterday Congress must boost the debt limit by Oct. 17 or the U.S. may be unable to pay its bills. The partial government shutdown persisted for a seventh day. The euro rose versus the dollar even as confidence in the 17-nation region waned. India’s rupee slid as the central bank made its second interest-rate cut in a month.
“Dollar-yen is basically the only game in town,” Brad Bechtel, a managing director at Faros Trading LLC in Stamford, Connecticut, said in a phone interview. “The government shutdown and debt-limit issues are keeping players on the sidelines. People are using dollar-yen as the primary hedge vehicle to express any risk associated with that.”
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