Dollar broadly higher vs. rivals in risk-off trade

Investing.com - The U.S. dollar was broadly higher against the other major currencies on Friday, as markets were jittery ahead of highly anticipated talks between U.S. President Barack Obama and Republican lawmakers on how to tackle the "fiscal cliff", while euro zone debt concerns remained.

During European morning trade, the dollar was sharply higher against the euro, with EUR/USD shedding 0.40%% to 1.2727.

The single currency came under pressure after the European Central Bank said in a report that the euro zone's current account surplus narrowed more-than-expected in August, declining to EUR0.8 billion from an upwardly revised EUR10.9 billion the previous month,

Analysts had expected the current account surplus to narrow to EUR9.2 billion in August.

Also Friday, official data showed that the euro zone's trade surplus expanded to EUR11.3 billion in September, more than the expected rise to EUR10.6 billion, from a surplus of EUR9.9 billion the previous month.

Meanwhile, investors remained concerned over the looming "fiscal cliff" in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1.

There are fears the U.S. economy will fall back into a recession, unless a divided Congress and the White House can work out a compromise before then.

The greenback was steady against the pound, with GBP/USD inching up 0.01% to 1.5868.

Elsewhere, the greenback edged lower against the yen, with USD/JPY slipping 0.13% to trade at 81.06, but rose against the Swiss franc, with USD/CHF advancing 0.36% to 0.9456.

The yen remained under pressure however, after Japan's main opposition leader from the Liberal Democratic Party (LDP) and possible next prime minister, Shinzo Abe, earlier said that the upcoming election would be about which party could boost a stagnant economy.

Japan dissolved parliament's lower house on Friday for a December 16 election that is likely to return the long-dominant Liberal Democratic Party (LDP) to power with a conservative former prime minister at the helm.

Meanwhile, Swiss National Bank Chairman Thomas Jordan reiterated his will to maintain the EUR/CHF cap at 1.20, adding that an overvalued Swiss franc remains a burden for the nation's economy.

The greenback was higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD easing up 0.06% to 1.0017, AUD/USD slipping 0.10% to 1.0321 and NZD/USD easing 0.04% to 0.8089.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.25% to 81.29.

Later in the day, the U.S. was to produce official data on the capacity utilization rate and industrial production, as well as a report on the balance of domestic and foreign securities purchases.