Investing.com - The euro rose against the dollar on Tuesday as hopes grew stronger the White House and Congress will successfully steer the country away from a dreaded fiscal cliff, a combo of tax hikes and spending cuts due to converge at the end of this year.
In U.S. trading on Tuesday, EUR/USD was trading up 0.49% at 1.3228, up from a session low of 1.3156, and off from a high of 1.3233.
The pair was likely to find support at 1.3067, Friday' low, and resistance at 1.3233, the earlier high.
Hopes the White House and Congress can put political differences aside and prevent an avoidable recession enticed investors out of the safe-haven dollar on Tuesday and into a risk-on trading session.
At the end of this year, the Bush-era tax breaks and other benefits expire at the same time government spending cuts kick in, a combination known as a fiscal cliff that could contract the economy by 0.5% next year if Congress fails to avoid it, according to Congressional Budget Office estimates.
Sticking points have been found in taxes, with Democrats originally calling for tax hikes on those earning at least USD250,000 a year, with Republicans originally opposed to tax hikes for anyone.
Both sides have made concessions, with Republicans warming up to tax hikes on the wealthy by offering to raise rates on those earning a minimum USD1 million a year, with Democrats reportedly countering by raising the floor to USD400,000 from USD250,000.
Meanwhile, a Standard & Poor's decision to upgrade Greece's sovereign credit rating to B-minus with a stable outlook from selective default bolstered the currency as well.
The ratings agency based its decision on Greece's successful bond buyback.
Elsewhere, the U.S. current account deficit narrowed in the third quarter of 2012, posting the smallest deficit since the fourth quarter of 2010, government data revealed earlier Tuesday.
The U.S. Bureau of Economic Analysis reported earlier that the country’s current account deficit narrowed to a seasonally adjusted USD107.5 billion in the third quarter, from a revised deficit of USD118.1 billion.
Analysts had expected the U.S. current account deficit to narrow to USD103.4 billion in the third quarter, which further stoked appetite for risk that came at the dollar's expense.
The euro, meanwhile, was up against the pound and up against the yen, with EUR/GBP trading up 0.19% at 0.8139, and EUR/JPY trading up 0.76% at 111.27.
In U.S. trading on Tuesday, EUR/USD was trading up 0.49% at 1.3228, up from a session low of 1.3156, and off from a high of 1.3233.
The pair was likely to find support at 1.3067, Friday' low, and resistance at 1.3233, the earlier high.
Hopes the White House and Congress can put political differences aside and prevent an avoidable recession enticed investors out of the safe-haven dollar on Tuesday and into a risk-on trading session.
At the end of this year, the Bush-era tax breaks and other benefits expire at the same time government spending cuts kick in, a combination known as a fiscal cliff that could contract the economy by 0.5% next year if Congress fails to avoid it, according to Congressional Budget Office estimates.
Sticking points have been found in taxes, with Democrats originally calling for tax hikes on those earning at least USD250,000 a year, with Republicans originally opposed to tax hikes for anyone.
Both sides have made concessions, with Republicans warming up to tax hikes on the wealthy by offering to raise rates on those earning a minimum USD1 million a year, with Democrats reportedly countering by raising the floor to USD400,000 from USD250,000.
Meanwhile, a Standard & Poor's decision to upgrade Greece's sovereign credit rating to B-minus with a stable outlook from selective default bolstered the currency as well.
The ratings agency based its decision on Greece's successful bond buyback.
Elsewhere, the U.S. current account deficit narrowed in the third quarter of 2012, posting the smallest deficit since the fourth quarter of 2010, government data revealed earlier Tuesday.
The U.S. Bureau of Economic Analysis reported earlier that the country’s current account deficit narrowed to a seasonally adjusted USD107.5 billion in the third quarter, from a revised deficit of USD118.1 billion.
Analysts had expected the U.S. current account deficit to narrow to USD103.4 billion in the third quarter, which further stoked appetite for risk that came at the dollar's expense.
The euro, meanwhile, was up against the pound and up against the yen, with EUR/GBP trading up 0.19% at 0.8139, and EUR/JPY trading up 0.76% at 111.27.