Dollar steady vs. rivals as U.S. "fiscal cliff" dominates

Published 12/28/2012, 10:50 AM
Updated 12/28/2012, 10:51 AM
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Investing.com - The U.S. dollar was steady against the other major currencies on Friday, after positive U.S. economic reports, as concerns over key U.S. budget negotiations continued to dominate market sentiment.

During U.S. morning trade, the dollar was steady against the euro, with EUR/USD slipping 0.06% to 1.3230.

The euro trimmed losses against the greenback after industry data showed that pending home sales in the U.S. rose more-than-expected in November, rising by 1.7% after a 5% increase the previous month. Analysts had expected pending home sales to tick up 1% in November.

A separate report showed that Chicago's purchasing magaers' index rose to 51.6 in December, from a reading of 50.4 the previous month, beating expectations for a rise to 51.0.

Earlier Friday, Markit research group said that the euro zone's retail purchasing managers' index deteriorated to 44.5 in December from a reading of 45.8 the previous month.

The report came after official data showed that French consumer spending rose 0.2% in November, more than the expected 0.1% increase and following a 0.1% fall the previous month.

The greenback was lower against the pound, with GBP/USD rising 0.28% to 1.6146.

Elsewhere, the greenback was almost unchanged against the yen and the Swiss franc, with USD/JPY inching up 0.02% to trade at 86.11, and USD/CHF dipping 0.05% to 0.9129.

Earlier in the day, Markit said Japan's PMI deteriorated to 45.0 in December from a reading of 46.5 the previous month.

A separate report showed that industrial production in Japan dropped far more-than-expected in November, declining 1.7% after a 1.6% increase the previous month. Analysts had expected industrial production to fall 0.5% last month.

Official data also showed that Japan's retail sales rose by 1.3% in November, more than the expected 1.1% increase, after a 1.2% drop the previous month.

The greenback was mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD inching 0.03% higher to 0.9955, AUD/USD easing up 0.07% to 1.0384 and NZD/USD adding 0.15% to 0.8222.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.07% to 79.77.

Investors remained cautious as U.S. President Barack Obama was to meet congressional leaders later Friday at the White House for last-minute talks on a "fiscal cliff" deal to avoid automatic tax increases and broad spending cuts that threaten the US economy's recovery.

The meeting comes just four days before the government goes over the so-called fiscal cliff, assuming no deal is reached. Without a deal, the U.S. could fall back into recession and drag much of the world down with it.


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