Portugal Colonial - Dollar jumps, stocks waver on fears over US debt talks

All eyes remain on Washington, where lawmakers remain deadlocked in negotiations to lift the country's borrowing limit to pay its debts and avert a market-rattling default.

The euro slid to $1.0821, the lowest level since early April, in a broad dollar rally as the greenback benefitted from its status as a safe bet in times of economic turmoil.

Asian and European equities were handed a tepid lead from Wall Street, where disappointing retail sales data and weak Home Depot earnings highlighted soft consumer demand.

But analysts said the readings were unlikely to give the Federal Reserve room to pause its interest-rate hiking campaign yet.

- 'Serious consequences' -

"The greenback is finding support as lawmakers in Washington seem unable to reach an agreement over the lifting of the debt ceiling," said ActivTrades analyst Ricardo Evangelista.

"The standoff between Democrats and Republicans is likely to continue and, if unresolved, could have serious consequences for the US and global economy."

US President Joe Biden met Republican House Speaker Kevin McCarthy and other congressional leaders at the White House on Tuesday after saying staff-level talks had produced no shift.

McCarthy told reporters there was still "a lot of work to do" before the country runs out of cash, which the Treasury has warned will happen around June 1.

There was a sliver of light, as he said he ultimately expected a deal.

And the White House said Biden was "optimistic that there is a path to a responsible, bipartisan budget agreement if both sides negotiate in good faith".

In a bid to get an agreement over the line, the president -- who flies to Japan on Wednesday for a G7 summit -- scrapped subsequent stops in Papua New Guinea and Australia, instead planning to return to Washington on Sunday.

- Japan growth boosts Nikkei -

Asia indices enjoyed mixed fortunes but star performer Tokyo jumped after figures showed Japan's economy grew more than expected in January-March thanks to a surge in tourism after pandemic border restrictions were lifted.

The figures helped push the Nikkei 225 to a 20-month high and it has now piled on more than 15 percent since the turn of the year.

Analysts said the strong market performance has been helped by corporate reforms and Bank of Japan's ultra-loose monetary policies.

- Key figures around 1050 GMT -

London - FTSE 100: FLAT at 7,747.60 points

Frankfurt - DAX: UP 0.3 percent at 15,940.51

Paris - CAC 40: DOWN 0.2 percent at 7,394.73

EURO STOXX 50: FLAT at 4,316.49

Tokyo - Nikkei 225: UP 0.8 percent at 30,093.59 (close)

Hong Kong - Hang Seng Index: DOWN 2.1 percent at 19,560.57 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,284.23 (close)

New York - Dow: DOWN 1.0 percent at 33,012.14 (close)

Euro/dollar: DOWN at $1.0832 from $1.0862 on Tuesday

Pound/dollar: DOWN at $1.2446 from $1.2488

Dollar/yen: UP at 136.96 yen from 136.39 yen

Euro/pound: UP at 87.01 pence from 86.98 pence

Brent North Sea crude: UP 0.5 percent at $75.29 per barrel

West Texas Intermediate: UP 0.5 percent at $71.23 per barrel

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