(MENAFN- Khaleej Times) The dollar fell in the longest stretch since June as traders weighed whether the economy is strong enough to warrant a reduction in monetary stimulus and as political budget wrangling threatened a government shutdown.
The yen rallied the most against the dollar of its 16 major peers as comments from Finance Minister Taro Aso damped bets the government will cut corporate taxes. A basket of emerging-market currencies fell. The Labour Department may report on October 4 that private payrolls increased by 180,000 this month. Investors are assessing those figures after the Federal Reserve surprised the markets on September 18 by maintaining its $85 billion in monthly bond purchases.
The dollar "entered the week on its back foot in response to the Fed's surprise move the week before," Joe Manimbo, a market analyst in Washington at Western Union Business Solutions, a unit of Western Union Co, said in a phone interview.
"In addition to mixed data we've seen on the economy, these headwinds on the recovery, investors grew even more skittish at the specter of a US government shutdown."
The Bloomberg US Dollar Index, which tracks the performance of a basket of 10 leading global currencies against the dollar, fell 0.1 per cent this week to 1,012.75 in New York. It reached 1,006.40 on September 19, the lowest level on a closing basis since February 20.
The US currency was little changed at $1.3522 per euro. The greenback gained 1.1 per cent to �98.24. Japan's currency added 1.1 per cent to 132.86 versus Europe's 17-nation common tender.
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