Concerns that debt ceiling spending cuts will weigh on US economy

Business Week: 

Demand for the dollar was limited on concern an agreement between President Barack Obama and Congressional leaders on raising the debt ceiling and spending cuts will weigh on growth in the world’s biggest economy. The House approved legislation to raise the U.S. debt limit by at least $2.1 trillion and cut federal spending by $2.4 trillion or more. The measure goes to the Senate for a final vote planned today.

“Looking ahead, people will be wondering whether the debt agreement will work, and spending cuts may weigh on growth,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo. “The dollar won’t switch to a real upward trend.”

U.S. personal income increased 0.2 percent in June after gaining 0.3 percent in May, according to the median estimate of economists in a Bloomberg News survey before today’s data.

The Institute for Supply Management’s factory index fell to 50.9 in July, the lowest since July 2009, from 55.3 the prior month, data showed yesterday. Economists in a Bloomberg News survey projected it would drop to 54.5.