Forex - EUR/USD dips amid fiscal cliff uncertainty

Published 12/20/2012, 02:36 AM
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Investing.com - The euro dipped against the U.S. dollar on Thursday, as uncertainty over the U.S. fiscal cliff weighed on market sentiment, dampening demand for riskier assets.

EUR/USD hit 1.3190 during late Asian trade, the pair’s lowest since Tuesday; the pair subsequently consolidated at 1.3223, dipping 0.04%.

The pair was likely to find support at 1.3143, Monday’s low and resistance at 1.3307, Wednesday’s high and an eight-and-a-half month high.

Market sentiment was hit by growing doubts over whether a deal to avoid the U.S. fiscal cliff will be reached ahead of the January 1 deadline,  fuelling concern that automatic tax hikes and spending cuts will be triggered.

A spokesman for President Barack Obama said Wednesday that the White House would veto a tax and spending proposal presented by House Speaker John Boehner.

The euro was fractionally lower against the pound, with EUR/GBP slipping 0.07% to 0.8135 and was lower against the yen, with EUR/JPY down 0.46% to 111.11.

The yen firmed up earlier in the session after the Bank of Japan unveiled additional easing measures, following calls by incoming Prime Minister Shinzo Abe for policymakers to implement more aggressive measures to spur growth and combat deflation.

The U.S. was to release the weekly report on initial jobless claims, as well as revised data on third quarter growth and data on manufacturing activity in Philadelphia later in the trading day. In addition, the U.S. was to publish industry data on existing home sales.



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