FX Update: The dollar has traded softer on U.S. political concerns
FX Update: The dollar has traded softer on U.S. political concerns, though has remained above recent trend lows versus the yen, euro and most other currencies. The narrow trade-weighted USD index (DXY) is down 0.2%, making a low at 90.33 and swinging the 37-month low of Wednesday at 90.14 back into scope. The House of Reps passed the stopgap funding bill yesterday, and the vote now goes to the Senate, which has delayed its vote until later today and where there remains significant opposition to the bill. Republicans have been making amendments to the bill in an attempt to entice Democrat votes, but Democrats signalled that they have enough Senate opposition to stop the bill, which does not give sufficient concessions to them on immigration, government spending and other issues. According to the Washington Post, 39 Democrat and at least two GOP Senate members are known to be in opposition, leaving the bill short of the 60 votes needed to advance. This will be the dominant focus for markets today for market participants. Should the vote fail, government agencies will start shutting down from tomorrow -- a scenario that would likely spark heavy dollar selling.