Dollar sinks to 8-month low after US shutdown

The dollar fell to an 8-month low against a range of currencies, before recovering slightly despite a partial shutdown of the US government.

Analysts said the fall in the dollar had not been more pronounced as the shutdown had been expected.
The shutdown began after the two houses of Congress failed to agree a budget.
The dollar index, which tracks the currency against a basket of six major currencies, at one point fell to 79.864, its lowest since February.
It has since picked up slightly.

Last Updated at 02 Oct 2013, 02:10 GMT *Chart shows local time

$1 buys	change	%
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The dollar also dropped to an eight-month low during Tuesday trading against the euro and a one-and-a-half year low against the Swiss franc, which is seen as a haven currency, before regaining some losses.

It also weakened against the Japanese yen, and fell back against the pound.
Wall Street edges higher Meanwhile, the US stock market ended the day higher as investors shrugged off the US shutdown.

The Dow Jones industrial average closed up 62 points, 0.4% at 15,191.7, while the Standard & Poor's 500 index rose 13 points, or 0.8%, to end Tuesday trading at 1695.

"It would appear that the markets either aren't overly bothered by Congress's inability to avoid a government shutdown, or aren't particularly surprised," said analysts from the Alpari trading group.
Debt ceiling Previously US government shutdowns have lasted anywhere between a day and a month.
The economic impact will depend on how long the deadlock lasts, but Goldman Sachs estimates a three-week shutdown could shave as much as 0.9% from US GDP this quarter.
Mike van Dulken, head of research at Accendo Markets, said the bigger worry was US politicians not being able to agree on lifting the so-called "debt ceiling", when the US government will reach the limit at which it can borrow money to pay its bills.
"The longer this goes unresolved, the closer it takes us to the 17 October debt ceiling, when there is no money to pay bills including sovereign debt - debt default is an altogether different issue," he said.
There are also concerns that markets will be affected by a possible delay in the release of key US economic data.
The government's construction spending report for August has already been delayed and there are concerns that the US Labor Department will not release its employment report, which is due on Friday.
Joe Rundle, head of trading at ETX Capital, said the shutdown could mean Federal Reserve policy makers holding off cutting back on their $85bn-dollar-a-month economic stimulus programme at their October policy meeting.
"Liquidity addicted market participants appear to be relatively sanguine this morning, hoping that this shutdown could go as far as seeing the Fed hold back from tapering all together in 2013," he said.