(Corrects time reference of low in headline and first
* Dollar remains under pressure after 200-day moving average
* Markets "not positioned for worst-case scenario" of U.S.
* Euro underpinned by hopeful signs that Greece could emerge
By Lisa Twaronite
TOKYO, Oct 8 The continuing U.S. fiscal standoff
pushed the dollar to a fresh two-month low against the yen in
early Asian trading on Tuesday and kept it under pressure
against a basket of major currencies.
Although a breakthrough still appeared elusive, a few
hopeful signs emerged on Monday, with President Barack Obama
saying he would accept a short-term increase in the nation's
borrowing authority to avoid a default. An influential Senator
is also said to be floating a plan to cut federal spending and
reform the U.S. tax code as part of a broader deal.
The dollar fell to 96.55 yen, its lowest
since Aug. 12, before recovering to 96.65 yen. Market
participants cited options barriers around 96.50 yen and at 96
yen, with the pair trading below its 200-day moving average --
now at 96.72 -- after breaching that technical support level.
"It's a bit frustrating, because people want to trade on
those technicals, but it's really being driven by external
factors and if that [the U.S. situation] were to rectify itself,
we'd probably be right back where we were at 98.50, 99," said
Bart Wakabayashi, head of forex at State Street Global Markets
Obama's press secretary, Jay Carney, told reporters the
president would be willing to accept a short-term debt ceiling
increase in order to get past the potential crisis date of Oct.
17. The government hits its $16.7 trillion borrowing limit then,
and in a worst-case scenario, it could default on its
"There's really not a lot of panic going on with the U.S.
situation. I think everyone's expecting they'll figure it out,
do the right thing," Wakabayashi said, adding that "the market
is not positioned for a worst-case scenario."
The dollar index fell 0.1 percent to 79.903, creeping
back toward its eight-month low of 79.627 hit on Thursday last
The euro was steady from late U.S. levels at $1.3578,
not far from an eight-month high of $1.3645 touched on Thursday.
The European currency was underpinned by news from Greece
that the struggling nation will emerge from six years of
recession next year, according to a draft budget forecast on
(Reporting by Lisa Twaronite; Editing by Shri Navaratnam)