Currency Market Reaction Amidst U.S. Government Shutdown Deal Talks

The yen hit its lowest since February while riskier currencies remained strong against the dollar, as traders anticipated the U.S. government shutdown resolution. The Australian dollar rose amid the euro and sterling's stability. Potential delays in Congress could impact currency rebounds if the deal isn't finalized soon.

The safe-haven yen plunged to its lowest since February on Tuesday, with riskier currencies gaining strength against the dollar. Market attention is focused on the political developments in the U.S., as traders eagerly await a resolution to the government shutdown that could restore federal funding.

The euro held steady at $1.1558 while the sterling edged up to $1.3177 amid breakthrough talks in the Senate on Sunday. However, the timeline for Congress to approve the deal remains uncertain, indicating a precarious balance for currency markets.

The Australian dollar saw a 0.7% uptick to $0.6536, with the yen touching 154.49 per dollar in morning trade. Analysts caution that any delay in the legislative process could destabilize the current rebound in currency markets.

(With inputs from agencies.)