Aust dollar flat in early trade

Local currency trades in narrow range as US budget impasse weighs.

The Australian dollar remains range-bound courtesy of the continuing United States political stalemate.

At 0700 AEDT, the local unit was trading at 94.33 US cents, unchanged from Tuesday.

Uncertainty remains over how long the partial US government shutdown will continue.

There are also concerns that the US government will not have enough money to pay its bills if an agreement to raise the debt ceiling is not reached by October 17.

The uncertainty, combined with the recent lack of economic data, has seen currencies trading in narrow ranges, BK Asset Management managing director Boris Schlossberg said.

"Markets remained in a state of suspended animation as progress on US budget talks proved elusive," Mr Schlossberg said.

"Although the threat of US default is clearly a worry for the currency market, one reason that it has not created more of a risk-off sentiment just yet is because the crisis is completely manufactured.

"Fiscally, the US is in relatively strong shape having reduced its budget deficits at the fastest pace in history.

"The longer the budget battle looms, the more difficult it will become to `restart' the US economy and that could have more negative consequences for the US dollar.

"For now the currency markets are content to tread water as they await fresh developments out of Washington DC."

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