Dollar broadly lower vs. rivals on U.S. budget hopes

Published 12/27/2012, 05:23 AM
Updated 12/27/2012, 05:24 AM
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Investing.com - The U.S. dollar was broadly lower against the other major currencies on Thursday, as hopes U.S. officials will manage to find a deal to avoid a fiscal crisis supported demand for riskier assets.

During European morning trade, the dollar was lower against the euro, with EUR/USD rising 0.35% to 1.3265.

Market players remained focused on developments surrounding the fiscal cliff in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1.

President Barack Obama was to end his vacation and return to Washington on Thursday in order to take part in talks to avert the crisis ahead of the year-end deadline. Both chambers of Congress are also due to return to work on Thursday.

The greenback was also lower against the pound, with GBP/USD adding 0.24% to 1.6176.

Earlier in the day, industry data showed that mortgage approvals in the U.K. rose less-than-expected in November, increasing by 33,600 after a 33,100 rise the previous month. Analysts had expected mortgage approvals to rise by 34,600 in November.

Elsewhere, the greenback was higher against the yen, with USD/JPY edging up 0.10% to trade at 85.71, but lower against the Swiss franc, with USD/CHF falling 0.28% to 0.9108.

The yen remained close to multi-month lows against the dollar after Shinzo Abe was formally approved as Japan’s prime minister by the lower house of parliament on Wednesday. Abe has recently called for unlimited easing by the Bank of Japan in order to weaken the local currency and spur growth in the recession-hit economy.

Earlier Thursday, new Finance Minister Taro Aso said that Abe has ordered him to compile a stimulus package without adhering to a previously agreed cap on new bond issuance, while new Economics Minister Akira Amari said the yen was heading toward appropriate levels with its recent weakening, and that it was important to maintain the downward trend.

The greenback was steady to lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD slipping 0.27% to 0.9917, AUD/USD inching 0.01% lower to 1.0377 and NZD/USD adding 0.19% to 0.8213.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.27% to 79.49.

Later in the day, the U.S. was to publish its weekly government report on initial jobless claims, as well as data on new home sales and consumer confidence.


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