U.S. Dollar Weakens On Govt. Shutdown Worries

The U.S. dollar declined against its major rivals in the Asian session on Friday, as traders focused on the possibility of the U.S. government shutdown that would take effect tonight, unless Senate passes short-term spending bill ahead of the deadline.

The House of Representatives has passed the short-term spending bill in a 230 to 197 vote on Thursday.

The bill faces stiff opposition in the Senate, where it needs 60 votes to pass the measure. Senate Majority Leader Mitch McConnell needs support from the Democrats to pass the bill out of the chamber due to opposition from conservatives.

The bill would keep the government funded until February 16.

Investors await the University of Michigan's preliminary report on consumer sentiment for January later in the day.

The currency fell on Thursday as downbeat readings on housing starts, building permits and manufacturing as well as concerns about a possible government shutdown made investors jittery.

The greenback dropped to 110.77 against the yen, from a high of 111.12 hit at 8:30 pm ET. On the downside, 109.00 is possibly seen as the next support for the greenback.

The greenback declined to more than a 4-month low of 0.9563 against the franc and held steady thereafter. The pair finished Thursday's trading at 0.9589.

The greenback weakened to a 2-day low of 1.2270 against the euro and moved sideways thereafter. The pair was valued at 1.2237 when it closed deals on Thursday.

The greenback dropped to a 2-day low of 1.3924 against the pound before holding steady thereafter. The pound-greenback pair was worth 1.3893 at Thursday's close.

Looking ahead, Swiss producer and import prices for December, Eurozone current account for November and U.K. retail sales for December are due in the European session.

Canada manufacturing sales for November and University of Michigan's preliminary consumer sentiment index for January are set for release in the New York session.