* Dollar slips as US govt shutdown concerns leave traders
* Euro helped by solid German, Italian confidence data
* But euro gains seen limited due to ECB policy uncertainty
By Gertrude Chavez-Dreyfuss
NEW YORK, Sept 25 The dollar fell on Wednesday
after four sessions of gains, weighed down by worries about
gridlock in Washington on the U.S. budget that could lead to a
government shutdown next week.
U.S. congressional officials must reach a budget deal by
Monday that would allow the government to keep running, but
negotiations have been contentious so far.
"The risk of a government shutdown next week is certainly
being felt by the market. We are in the initial stages and right
now, the dollar is getting hit," said Greg Moore, currency
strategist at TD Securities in Toronto.
In early New York trading, the dollar fell 0.1 percent
against a basket of currencies to 80.473.
The euro was up 0.2 percent at $1.3497. It was helped
by data showing consumer confidence in Germany at a six-year
high and morale in Italy at its strongest in more than two
This took the euro to a session peak of $1.3519, closer to
last week's high of $1.3569, hit after the Federal Reserve's
surprise decision to keep its bond-buying stimulus intact.
Traders reported strong chart support at $1.3450.
A lack of clarity over how long the U.S. central bank will
delay scaling back stimulus has also weighed on the dollar.
However, euro gains were expected to be limited by concerns
about the possibility of more euro zone monetary easing after
European Central Bank President Mario Draghi this week spoke of
the possibility of the ECB providing more cheap long-term loans.
"There are so many uncertainties ... This is making people
reluctant to go back into risk," said Ian Stannard, head of
European currency strategy at Morgan Stanley.
The dollar was down 0.25 percent against the Japanese yen at
98.46 yen, pressured by an easing in U.S. government bond
But the dollar rose against higher-yielding and riskier
currencies. The Australian dollar was down 0.3 percent
at $0.9362 while the New Zealand dollar - which was also
pressured by a jump in the country's trade deficit - fell 0.6
percent to $0.8226.
A U.S. durable goods report for August came in slightly
higher than expected on Wednesday, with the headline number
rising 0.1 percent, compared with expectations for a flat
Andrew Wilkinson, chief economic strategist, at Miller Tabak
& Co in New York thinks the data does not point to an
acceleration of economic activity at this stage.
"The report argues in favor of the FOMC's recent decision to
await further data points that might indicate sustainability of
demand," he said.