The dollar traded lower on Monday, while the US government remained shut until the stopgap vote later in the day.
The US dollar index, which gauges the greenback’s strength against six major rivals, was down 0.2 percent to $90.23, but regained some losses after falling to 90.15 and still keeping its footing above its three-year low of 90.11 on Thursday.
The dollar was flat at 110.70 against the yen. Analysts earlier expected the pair to continue trading above Friday’s trough of 110.49 during European open.
The currency declined 0.2 percent to 1.2466 against its Canadian counterpart, while it slipped 0.2 percent to 0.9606 against the Swiss franc.
Senior strategist Shin Kadota said that the dollar’s losses have been limited, seeing that discussions going into Friday were turning difficult and that the market had time to price in a US government shutdown.
The greenback earlier found some bearing through a more optimistic US yields. The 10-year bond yield extended last week’s rise by gaining 0.4 percent to 2.650 on Monday.
The euro on the other hand, rose 0.3 percent to 1.2260 against the dollar, but was so far unable to reach its three-year high of 1.2323 that it set on Wednesday.
The pound added 0.3 percent to 1.3905 against the greenback, but was still somewhat far from its 1-1/2 gains of $1.3942.
Other profitable currencies, such as the Australian and New Zealand dollar, increased 0.2 percent to 0.8015 and rose 0.4 percent to 0.7307 respectively.
US Government Shutdown Continues
The first government shutdown since 2013 has continued for the third day on Monday, after Senate leaders failed to agree on a last minute bill to fund government operations and agencies.
The funding was originally due to expire in October, but due to the passage of a number of temporary spending measures, the deadline was moved to January 19.
Kadota stated that the shutdown is not expected to last for a long time, but it may raise concerns with regards to its negative impact on the US economy if it continues for several weeks.
A House-passed stopgap bill that was supposed to prevent the shutdown fell apart in the Senate on Friday, as the Democrats and Republicans failed to see eye to eye over immigration and border security matters, putting most government services to a stop.
The measure failed to pass through the Congress, after getting a procedural margin vote of 50 to 49. Five Democrats supported the bill, while four Republicans voted against it. The Senate needed 60 to pass a spending bill that could have funded the government through February 16.
Members of the Congress were stuck on what should be included in the bill to keep the government going. Democrats have urged any agreement should also take in safety measures for nearly 700,000 immigrants that were brought to the US at a very young age.
The Senate had held negotiations on Sunday night to end the shutdown, but they were still unsuccessful to settle a deal, delaying a planned vote until Monday noon.
Hopes of reaching an agreement had grown in the previous day, after a number of Republican and Democratic moderates had held talks about immigration issues.
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