USD lower on deficit concerns

USD lower on deficit concerns

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The US dollar was weaker Monday on fears that the government’s plan to buy $700 in bad debt from banks will increase the nation’s already-soaring deficit.

Some forecasts have the debt ceiling reaching as high as $11.315 trillon due to the plan.

The greenback was also hurt by predictions that new data due later in the week will show that sales of both new and existing homes fell again in August.

In addition, durable goods orders are widely expected to be reported lower for last month.

At late morning in New York, the dollar traded at $1.4683 to the euro while it took ¥106.4450 to buy a dollar.

The yen gained on the Australia and New Zealand dollars as carry trades became less popular, with the Japanese currency trading at ¥89.8502 to the Aussie and at ¥73.807 to the New Zealand currency.

The South African rand weakened in relation to the greenback and the euro after the resignation of the president there, which is likely to mean the selling of South African assets by foreign investors.

In late morning trade in New York the rand was at R7.9675 to the US dollar and at R11.695 to the euro.