TOKYO: The dollar rallied in Asian trade before easing on Monday after Washington avoided a government shutdown by agreeing to cut around $38.5 billion from federal spending, dealers said.
The news was "positive for the dollar," said Yuichiro Harada, senior vice president of the Forex division at Mizuho Corporate Bank.
However, dealers warned that the development was unlikely to have a lasting impact, with the focus now on US March consumer price index data due Friday and a series of speeches by Federal Reserve officials.
The euro was supported after South African President Jacob Zuma said in Tripoli Sunday that Libyan leader Moamer Qadhafi had accepted an African Union peace plan designed to end the current conflict, dealers said.
The euro was at $1.4467 from $1.4480 late Friday. The yen was at 84.75 to the dollar from 84.82, after the greenback earlier rose to 85.16.
The Japanese unit was at 122.63 to the euro from 122.73.
A dramatic 11th-hour deal slashing spending staved off a US government shutdown, ending a rancorous budget row between President Barack Obama and his newly empowered Republican foes.
Party leaders clinched the agreement, including $38.5 billion dollars of extra spending cuts, after intense bargaining, barely an hour before the federal government effectively ran out of money at midnight Friday.
The relatively weaker yen since Japan and its G7 counterparts staged a concerted intervention in March has been driven partly by heightened risk appetite, fuelling demand for high-yield currencies, dealers said.
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