The dollar is looking weak against other currencies as US government is facing its first shutdown in four years, say analysts.
Democrat senators appear poised to block the latest funding bill to keep the government running.
A temporary spending bill was passed by the House of Representatives last night (Thursday), but the Senate also has to agree the deal.
Anger on immigration
Democrat senators – angered by president Trump’s comments about “sh*thole countries” and aggressive stance on immigration – are threatening to block the bill.
If it fails, funding to run the government will run out at midnight tonight.
The last government shutdown last for two weeks in October 2013, when the Republican-controlled House, opposed to Obamacare legislation, refused to sign off the budget. Roughly 800,000 federal employees were put on indefinite leave.
Continuing dollar weakness
Miles Eakers, chief market analyst at Centtrip, said, “The dollar continues to show weakness ahead of a possible US government shutdown.
“Late last night the House of Representatives passed concessions on a major increase in defence spending and a hard-line immigration bill.
“But Senate Democrats said they would likely block the measure unless President Donald Trump and Republicans include protection for young immigrants.”
Vulnerable against euro and pound
Eakers said an impasse could result in Trump celebrating his first anniversary in office with the first shutdown in four years, despite Republicans holding a majority in both houses.
“After reports of the vote, we saw continued, but muted, dollar weakness, pushing the GBP/USD pair back above $1.39 and EUR/USD nearer the $1.23 resistance level,” he said.