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Dollar broadly lower on U.S. fiscal cliff resolution hopes

Published 11/19/2012, 05:23 AM
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Investing.com - The U.S. dollar was broadly lower against the other major currencies on Monday, as hopes for a resolution on the U.S. fiscal cliff supported investor demand for higher-yielding assets.

During European morning trade, the dollar turned lower against the euro, with EUR/USD rising 0.27% to 1.2777.

Market sentiment was bolstered after U.S. Congressional leaders said talks with President Barack Obama on Friday to avert the fiscal cliff, a combination of automatic tax increases and spending cuts due to come into effect from January, were "constructive."

The euro was also supported by hopes that officials from the International Monetary Fund and the euro zone would reach an agreement on a delayed bailout payment for Greece.

But concerns over the economic outlook for the region persisted after official data earlier showed that Italian industrial orders tumbled by 4.0% in September, after a 0.6% increase the previous month.

A separate report showed that the level of loans in arrears in Spanish banks rose to a record 10.7% in September.

The greenback was slightly lower against the pound, with GBP/USD easing up 0.14% to 1.5904.

Elsewhere, the greenback was trading just below a seven-month high against the yen, with USD/JPY dipping 0.11% to 81.24 and was lower against the Swiss franc, with USD/CHF down 0.26% to 0.9431.

The yen came under broad selling pressure ahead of Japanese elections on December 16 which are likely to see the opposition party, which advocates more aggressive monetary easing measures by the Bank of Japan, come to power.

The greenback was weaker against its Canadian, Australian and New Zealand counterparts, with USD/CAD sliding 0.17% to 0.9994, AUD/USD rising 0.42% to 1.0383 and NZD/USD up 0.27% to 0.8147.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.21% to 81.10.

Later Monday, the U.S. was to release an industry report on existing home sales.



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