U.S. Dollar Rises on Debt Ceiling Deal; Pound Falls

Investing.com - The U.S. dollar surged towards five-week highs on Tuesday after U.S. President Donald Trump and Congres struck a deal to raisethe debt ceiling, easing fears of the government defaulting.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, gained 0.5% to 97.375 by 10:53 AM ET (14:53 GM).

The dollar rose against the Japanese yen, with USD/JPY up 0.2% to 108.06.

The pound fell after a slight bounce as Boris Johnson, known for his hardline stance on Brexit, was named Prime Minister and leader of the Conservative Party. Johnson defeated Jeremy Hunt by a margin of 2 to 1.

No meeting between the U.K. government and European Union is expected over the summer, with EU officials wanting to see a plan from Johnson first, the BBC reported.

Johnson reiterated in a speech to party members his goal of leaving the EU by October 31, uniting a split party on Brexit, and leading the Tories in winning the next general election.

GBP/USD declined 0.3% to 1.2431.

Meanwhile, the International Monetary Fund lowered its global forecasts due to trade and Brexit uncertainties. The IMF said in a report that downside risks have put pressure on the global economy, which is expected to grow 3.2% in 2019 and 3.5% in 2020, a drop of 0.1% for both.

Elsewhere, EUR/USD slumped 0.5% to 1.1151, while USD/CAD gained 0.2% to 1.3139.

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