Tokyo - The dollar slipped in Asian trade on Wednesday owing to uncertainty caused by the US government shutdown but losses were limited by hopes for a quick resolution to the crisis.
The greenback bought 97.87 in Tokyo, down from 97.94 yen late in New York and well off the 98.62 yen in Tokyo before the shutdown.
The euro fetched $1.3521 compared with $1.3527 while it slipped to 132.32 yen from 132.51 yen with the single currency hit by profit-taking after a recent rally and political uncertainty in Italy.
Hopes for a dollar rally will depend largely on how quickly Washington legislators resolve their budget dispute, with investors still betting a solution can be found soon, dealers said.
“If the shutdown continues beyond this weekend, further dollar weakening can be expected,” Junya Naruse, chief strategist at Daiwa Securities, told Dow Jones Newswires.
Analysts see the shutdown as bearish for the dollar because it could slow economic growth and while also put off any Federal Reserve wind down of its stimulus scheme.
“Market participants are taking the view that this partial shutdown won't be especially damaging for the economy but until the effects are known, the shutdown is a reason for the Fed not to reduce its $85-billion bond-buying programme,” National Australia Bank said. - Sapa-AFP