NEW YORK: The dollar regained ground against the euro and the Japanese yen on Wednesday, a day after being clobbered by investors' nervousness over the debt-ceiling standoff in Washington.
The dollar was trading for $1.4364 against the euro in New York at 2100 GMT, compared to $1.4509 at the same time on Tuesday.
The greenback also strengthened against the yen, rising to 77.96 yen from 77.90 a day earlier. At one point Wednesday the dollar dropped to a four-month low against the yen, at 77.58, before recovering.
Gold surged to a new record high of $1,628.05 per troy ounce in intraday trading in New York before dropping back to around $1,615.
The dollar has been shaken in recent days by uncertainty about events in Washington, where Democrats and Republicans are locked in a tense stalemate over raising the US government's $14.29 trillion debt ceiling.
The White House has warned that the debt ceiling must be raised by next Tuesday or else the US Treasury could be forced to default on its debts, which would likely roil financial markets and sap confidence in the dollar.
"While there is a steady stream of data and events, markets will remain mostly focused on the US debt ceiling negotiations," said Nick Bennenbroek, head of currency strategy for Wells Fargo.
"While uncertainty surrounding those talks persists, we continue to see the greenback trading with an overall softer bias."
The dollar strengthened slightly against the Swiss franc, rising to 0.8014 francs from 0.8009 late Tuesday.
It also rose against the British pound, trading for $1.6328 against the pound on Wednesday, compared to $1.6409 a day earlier.
Copyright AFP (Agence France-Presse), 2011
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