Dollar hovers near 2-month high as debt ceiling angst saps risk appetite
The U.S. dollar held near a two-month high on Wednesday on safe-harbour demand as negotiations over raising the U.S. debt ceiling dragged on with no imminent resolution in sight.
Treasury Secretary Janet Yellen has warned that the federal government could no longer have enough money to pay all its bills as soon as June 1, raising the risk of a damaging default.
Investors largely shunned riskier investments as another round of talks between the White House and the Republicans to raise the borrowing limit ended on Tuesday with no sign of progress.
"Progress on a deal is proving difficult and market jitters are increasing," said Harry Ottley, an economist at Commonwealth Bank of Australia, noting that markets sentiment is closely aligned with progress on the negotiation.
The dollar index, which measures the U.S. currency against six key rivals, w
