The US dollar continued to show signs of weakness and fell against the euro and the Japanese currency as the US politicians failed to raise the debt ceiling to conclude a partial government shutdown.

The talks between President Barack Obama and House Republicans did not reach an agreement and the senators from both parties were struggling to prepare an accord in order to avoid a US payment default, which cause send ripples across the global economy. The borrowing authority of the country would lapse on 17 October, 2013 and the government must act to avoid a default.

The yen rose against the US dollar for the first time in five days while euro gained before a report forecast showed that industrial output is set to rise in the region. The dollar weakened 0.1 per cent to $1.3563 per euro after touching $1.3646 on 3 October, which is its lowest level in eight months. The American currency fell 0.3 per cent to 98.28 yen while yen rose 0.2 per cent to 133.29 per euro.

Standard & Poor's 500 Index futures signalled equities will fall in the U. S. and International Monetary Fund Managing Director Christine Lagarde warned that the partial shutdown of the US government is threatening the global economy.