LONDON (MarketWatch) — The dollar rose against most major currencies on Tuesday, finding support in signals from Washington that lawmakers are getting closer to end a stalemate on raising the U.S. debt ceiling and reopen government. Meanwhile the Aussie hit a four-month high after the release of minutes from the Reserve Bank of Australia.
The ICE dollar index DXY +0.28% , which measures the greenback against a basket of six rival currencies, rose to 80.596, up from 80.296 in late North America trade on Monday.
The gains came on hopes the political stalemate keeping the U.S. government shut down for 15 days was about to broken. Senate Majority Leader Harry Reid said on Monday he was “very optimistic” about concluding a deal “this week” to raise the debt limit as well as end the government shutdown. Sen. Mitch McConnell, the Republican minority leader, said he shared Reid’s feeling that “we’ll get a result that’s acceptable to both sides.”
The U.S. will run out of borrowing authority on Oct. 17, unless Congress agrees on measures to lift the debt ceiling.
Elsewhere, the Australian dollar climbed to an almost four-month high against the U.S. dollar after the country’s central bank signaled it sees no urgency to cut interest rates, as the country’s prospects of joining a global recovery continue to brighten. The AussieAUDUSD +0.43% exchanged hands at 95.20 U.S. cents, up from 94.99 U.S. cents on Monday.
Simon Smith, chief economist at FxPro, said the RBA scaled back on saying it may use a weaker currency as a means to boost the economy.
“This had been a theme for some time from the RBA, so combining this with the more neutral stance to policy taken at the September meeting, the Aussie received further support,” he said in a note about the moves on Tuesday.
The British pound GBPUSD -0.22% slipped to $1.5919 from $1.5991. The Office for National Statistics said the U.K. consumer-price index grew by 2.7% year-on-year in September, above expectations of a 2.6% print.
In other currency crosses, the euroEURUSD -0.46% fell to $1.3480 from $1.3566 on Monday, while the dollar traded at 98.585 Japanese yen, from ¥98.54.
