how does U.S debt ceiling affect the dollar

Indonesia stock info - how does U.S debt ceiling affect the dollar : The U.S. dollar fell against currencies considered safe havens Monday as deadlocked U.S. debt-ceiling talks left investors in limbo. The dollar’s misery is also helping the euro regain some lost ground.

Asian Currencies Strengthen as U.S. Debt Stalemate Spurs Dollar Sell-off
The won strengthened 0.4 percent to 1,052.25 per dollar as of 11:29 a.m. in Seoul, after declining 0.4 percent yesterday, according to data compiled by Bloomberg. The ringgit rose 0.3 percent to 2.9628, the Singapore dollar gained 0.2 percent to S$1.2043 and Thailand’s baht appreciated 0.2 percent to 29.70.The Dollar Index traded on ICE Futures in New York, which compares the currency to those of six major trading partners, dropped 0.3 percent to 73.914.

US debt default would bring weaker dollar, more expensive oil and gas
When the dollar falls, oil almost always rises. Crude is priced in dollars. When the dollar falls, investors holding foreign money can buy oil more cheaply. That sparks demand for oil, and increased demand pushes prices higher. A weaker dollar also means oil producers like Saudi Arabia will earn less for every barrel of oil they sell. Oil prices tend to rise when this happens because traders expect OPEC and other countries to cut production in response.

When the dollar falls, investors turn to commodities and stocks. The effect was apparent in early May. The U.S. Dollar Index, which tracks the greenback versus other major currencies, dropped to its lowest level of the year. At the same time, oil prices rose above $113 per barrel, the highest level since 2008.

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