The United States of America dollar dropped against the yen in a quiet market on Wednesday,December 6, with appetite for risk muted as concerns about a possible U.S. government shutdown offset optimism about progress on tax reform legislation.
The dollar hit a five-day low of 111.99 yen JPY=EBS, down half a percent on the day, with the Japanese currency displaying its standard relationship with the country’s stock market: When it falls, the yen gains.
Analysts said it was unlikely there would be any big moves in the dollar before Friday’s closely watched non-farm payrolls report and perhaps not until next week’s U.S. Federal Reserve policy meeting.
Moves in Bitcoin dwarfed those in regular currencies again, with the cryptocurrency hitting a new record high of more than $12,800 BTC=BTSP, up almost 10 percent on the day. It is on track for its strongest quarter since 2013 after almost tripling in price since the start of October.
“This is a typical risk-off move,” said BMO Capital Markets currency strategist Stephen Gallo, in London. “The yen crosses have been a drag all morning, and I think that’s fed through into euro/dollar, with a weaker euro/yen dragging down the euro against the dollar too.”
The euro edged down 0.1 percent to $1.1815.
The dollar index, which tracks the greenback against a basket of six major currencies, was flat at 93.297 .DXY=.
The United States’ Republican-controlled House of Representatives voted on Monday to go to conference with the Senate to begin formal negotiations on a tax reform bill, with the Senate expected to hold a similar conference vote later this week – a development seen as positive by markets.
But in the meantime, the possibility of a U.S. government shutdown looms, if lawmakers fail to reach a budget accord this week. Government funding is set to expire on Friday.
The Canadian dollar edged up 0.2 percent to C$1.2657 against its U.S. counterpart ahead of a Bank of Canada policy meeting later in the day, Reuters reports.