Dollar remains broadly lower on U.S. budget jitters

Investing.com - The dollar remained broadly lower against the other major currencies on Friday, as concerns over the consequences of the two-week U.S. government shutdown sparked speculation that the Federal may not scale back its bond purchases in the near future.

During U.S. morning trade, the dollar was lower against the yen, with USD/JPY down 0.08% to 97.83.

The greenback weakened broadly amid fears over the impact of the government shutdown on the already fragile economic recovery, which could prompt the Federal Reserve to delay plans for scaling back its stimulus program until at least the start of next year.

The possibility of another debt crisis also loomed, as the temporary debt ceiling agreement reached early Thursday does not resolve the underlying budgetary issues dividing Republicans and Democrats.

The deal will fund the government until January 15 and raise the government borrowing limit until February 7. Both sides also agreed to talks over broad budget issues in an attempt to reach a longer-term deal by December 13.

Earlier Friday, Bank of Japan Governor Haruhiko Kuroda said that effects of the central bank's monetary stimulus are firmly emerging on economic activity and that the positive impact is spreading in the economy and prices.

The euro was steady against the dollar, with EUR/USD inching up 0.04% to 1.3682.

The dollar was lower against the pound, with GBP/USD up 0.14% to 1.6185, and steady against the Swiss franc, with USD/CHF easing up 0.02% to hit 0.9026.

Elsewhere, the greenback was broadly lower against its Australian, New Zealand and Canadian counterparts, with AUD/USD gaining 0.37% to 0.9669, NZD/USD edging 0.12% higher to trade at 0.8496 and USD/CAD down 0.10% to 1.0284.

Reserve Bank of Australia Governor Glenn Stevens said in a speech earlier that good progress has been made, but there remains a lot of work to do be made to make sure that post-global financial crisis reforms are implemented.

Separately, the export-related currencies found support after official data showed China gross domestic product grew by 7.8% in the third quarter, in line with expectations and up from 7.5% in the three months to June.

The data eased concerns over the strength of the recovery in the world's second-largest economy.

A separate report showed that industrial production in China rose by an annualized rate of 10.2% in September, exceeding expectations for a 10.1% increase, after a 10.4% rise the previous month.

In Canada, official data showed that core consumer price inflation remained unchanged at 1.3% in September, confounding expectations for a downtick to 1%.

Consumer price inflation, including the eight most volatile items, rose to 0.2% last month, from a flat reading in August, compared to expectations for a rise to 0.1%.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.06% to 79.68.