Partial Shutdown of the US Government Puts Pressure on Dollar

Washington, Oct 8 (Prensa Latina) The dollar has been victim of the uncertainty generated by the U.S. governmentâ�Ös partial shutdown because of the large differences between Democrats and Republicans. Washington went into partial shutdown on October 1st after both houses of Congress were not able to agree on a new budget.

President Barack Obama promised not to allow Republicans to undermine the health care legislation promulgated by him in 2010 as a condition to reopen government activities, and accused them of carrying out an ‘ideological crusade’ that will not succeed against the Affordable Care Act (better known as Obamacare).

In that situation, the dollar slid to the weakest level in eight months against other hard currencies.

The currency retreated to a minimum of 97.69 yen, the lowest since August 12th , when it also registered losses to the Euro and the Swiss franc.

Analysts remarked that investors are betting on safer currencies like the yen and the Swiss franc, which dragged the dollar downward.

Meanwhile, tension also rises as it is possible that an agreement on an government’s increased debt ceiling is achieved before October, 17th, when the Treasury will run out of money.

According to experts, since the dollar is the international reserve currency and the biggest debtor in the world, the signs that it will be unable to pay its debt, an estimated 16.7 trillion dollars, could trigger lot of pessimism and instability worldwide.

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