* Euro and dollar stay steady
* Concerns over US govt shutdown offset solid German data
* German consumer confidence rises to 6-year high
* Prospect of ECB providing more cheap loans may hurt euro
By Jessica Mortimer
LONDON, Sept 25 The euro held steady against the
dollar on Wednesday as solid German data was offset by concerns
about a possible U.S. government shutdown and uncertainty over
euro zone monetary policy.
Congressional authorisation for the U.S. government to spend
money runs out on Sept. 30, unless Congress passes a "continuing
resolution" to keep the government running. U.S. politicians
have not yet found a common ground.
Analysts said failure to reach agreement would probably lend
the dollar safe-haven support against riskier currencies,
including the euro.
The euro was steady at $1.3479, having dropped from a
peak of $1.3569 hit last week after the U.S. Federal Reserve's
surprise decision to keep its bond-buying stimulus intact.
Data showing German consumer confidence at a six-year high
helped underpin the euro but traders said a drop below chart
support at $1.3450 could herald further losses.
"There are so many uncertainties, over policy and over the
U.S. debt ceiling negotiations and renewed signs of slowing in
China. This is making people reluctant to go back into risk,"
said Ian Stannard, head of European currency strategy at Morgan
He added that the risk of a potential U.S. government
shutdown should provide the dollar with near-term support.
A lack of clarity over how long the U.S. central bank would
delay scaling back its bond-buying stimulus and comments by
European Central Bank President Mario Draghi this week about the
possibility of the ECB providing more cheap long-term loans have
pinned down the dollar and the euro.
The dollar was steady against a basket of currencies
at 80.563. Against the yen, it dipped 0.1 percent to 98.63 yen
, pressured by an easing in U.S. bond yields after weaker
"In the end, I think the dollar will break higher, but U.S.
bond yields will have to rise for that to happen," said a trader
for a Japanese bank in Singapore, adding that such moves were
unlikely to occur immediately.
"For now, everybody is cautious on the (U.S.) economy, in
the wake of the FOMC," he said, referring to last week's Fed
The New Zealand dollar fell 0.6 percent to $0.8230
after government data showed the country's trade deficit soared
to its highest level in five years.