Forex - EUR/USD steady as fiscal cliff optimism boosts sentiment

Published 12/18/2012, 02:31 AM
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Investing.com - The euro was steady near five-month highs against the U.S. dollar on Tuesday, as hopes that the U.S. fiscal cliff could be avoided supported investor demand for riskier assets.

EUR/USD hit 1.3177 during late Asian trade, the session high; the pair subsequently consolidated at 1.3164, inching up 0.01%.

The pair was likely to find support at 1.3065, Friday’s low and near-term resistance at 1.3187, Monday’s high and a five-month peak.

Market sentiment was supported by hopes U.S. lawmakers will reach an agreement in time to avoid automatic tax hikes and spending cuts due to take effect on January 1 which investors’ fears could derail the U.S. recovery and threaten global growth.

On Monday, European Central Bank President Mario Draghi said that the economic environment in the euro zone was challenging and was likely to remain so for some time to come.

The euro was little changed against the pound, with EUR/GBP inching up 0.01% to 0.8124 and was steady close to multi-month highs against the weaker yen, with EUR/JPY edging up 0.06% to 110.48.

The U.S. was to produce government data on the current account later in the trading day.



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