By Daniel Kruger 

The U.S. dollar fell Thursday as Congress appeared no closer to resolving a budget impasse that could lead to a government shutdown after Friday.

The Wall Street Journal Dollar Index, which tracks the currency against a basket of 16 others, declined 0.3% to 84.42, the lowest closing level since May 2015. The dollar fell broadly, with declines of 0.4% against the euro, 0.5% against the British pound and 0.2% against the yen.

The government's current funding expires at 12:01 a.m. ET Saturday and investors are watching closely as Congress and President Donald Trump try to negotiate a stopgap spending bill -- the third such measure since December for the fiscal year which started Oct. 1.

The risk of a shutdown "is optically bad" for the dollar, said Shahab Jalinoos, global head of currency strategy at Credit Suisse Group AG. "Investors are also conscious of how high U.S. asset prices are right now."

The decline followed Wednesday's gains in the dollar spurred by Apple Inc.'s announcement that it would make a one-time tax payment of $38 billion to repatriate overseas cash holdings and ramp up its spending in the U.S. The company said the move was the result of recent changes to U.S. tax law, under which companies can pay a one-time tax of 15.5% on overseas cash holdings repatriated to the U.S.

Decisions by other companies to pursue similar plans will also help bolster the U.S. dollar, though they are unlikely to alter the trend of a weakening dollar, Mr. Jalinoos said.

U.S. companies bringing home overseas profits create a demand for the dollar as those companies exchange other currencies for the greenback to make tax payments and use the funds within the U.S.

Write to Daniel Kruger at Daniel.Kruger@wsj.com

(END) Dow Jones Newswires

January 18, 2018 17:59 ET (22:59 GMT)

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