Dollar drops on US govt shutdown

<p>The US government’s shutdown has affected the dollar.</p>

The US dollar has fallen in value against its rivals today (October 1st), after the country's government went into shutdown mode.

After Congress failed to agree a new budget deal, the dollar fell to an eight-month low against the euro, reports BBC News.

The greenback also slipped to a one-and-a-half year low against the Swiss franc, fell back against the pound and dropped in value against the yen.

Mike van Dulken, head of research at Accendo Markets, told BBC News that investors are concerned Congress will not reach a deal before the debt ceiling deadline on October 17th.

"The longer this goes unresolved, the closer it takes us to the October 17th debt ceiling, when there is no money to pay bills including sovereign debt – debt default is an altogether different issue," he said.

Congress has been unable to reach agreement over US president Barack Obama's plans to introduce universal healthcare insurance for American citizens.

Mr Obama later tweeted: "They actually did it. A group of Republicans in the House just forced a government shutdown over Obamacare instead of passing a real budget."

Find up to date information on the FTSE 100 and spread betting strategies at City Index

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.