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Dollar firms as Obama taps Yellen for Fed

business Updated: Oct 10, 2013 09:06 IST
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The dollar on Wednesday advanced against major currencies after President Obama tapped Janet Yellen to lead the US Federal Reserve, signaling a continuation of the Fed's easy-money policy.

Around 2200 GMT, the euro traded at $1.3523, down from $1.3572 on Tuesday.

The greenback bought 97.37 Japanese yen, up from 96.86.

The euro also rose against the yen, trading at 131.74 from 131.47.

Analysts said Yellen's nomination restored a note of normalcy to Washington, where a government shutdown dragged into a ninth day with no sign of political compromise on a budget for the 2014 fiscal year that began October 1.

"While the selection of Yellen, a known policy dove, would generally be seen as negative for the dollar, an active Federal Reserve could be seen as positive for an economy that could become increasingly vulnerable to fiscal headwinds from a chaotic backdrop in Washington," said Omer Esiner, chief market analyst at Commonwealth Forex Exchange.

Joe Manimbo, senior market analyst at Western Union Business Solutions, said that Yellen's nomination "offered a momentary distraction to the only game in town these days, America's ongoing political crisis in Washington."

Obama on Wednesday invited Republican and Democratic lawmakers to the White House to try to work through budget disagreements that have resulted in the partial government shutdown and threatens to cause a debt default if the two sides fail to raise the borrowing limit by an October 17 deadline.

Among other currencies, the British pound fell to $1.5954 from $1.6084 Tuesday.

The dollar rose to 0.9100 Swiss franc from 0.9037.