Forex- Dollar mixed against rivals as cliff talks progress

Investing.com- The U.S. dollar was mixed against its major rivals in the early part of Wednesday’s Asian session on hopes U.S. policymakers are inching closer to a solution for the fiscal cliff. The dollar fell during Tuesday’s U.S. session as traders bid up riskier assets and high-yielding currencies as fiscal cliff headlines dominated Tuesday’s newsflow.

In Asian trading Wednesday, EUR/USD rose 0.02% to 1.3232. The pair traded as high as 1.3232 and as low as 1.3223. EUR/USD jumped 0.44% to 1.3222 after Standard & Poor's boosted Greece’s sovereign credit rating. Previously rated "selected default" by S&P, Greece’s credit rating has been restored to B- with a stable outlook. The ratings agency based its decision on Greece's successful bond buyback.

Riskier assets, including high-yielding currencies, oil and stocks also got a lift in the U.S. after the National Association of Home Builders said its NAHB/Wells Fargo Housing Market index of home builder sentiment jumped to 47 this month from a revised 45 last month. Economists expected a December reading of 47. The December reading is the best since April 2006, but readings below 50 indicate a majority of builders hold an unfavorable outlook.

While no agreement has been finalized, the Obama Administration and Congressional Republicans continue negotiations about averting the fiscal cliff and that alone seems to be giving traders reason to bid up riskier assets.

The sticking points appear to be from where spending cuts will come and the income threshold at which taxes will rise. President Obama has proposed raising taxes on those earning more than $400,000 per year while House Speaker John Boehner has proposed increased taxes for those earning $1 million or more per year.

Elsewhere in Asian trading, USD/JPY continued moving higher, gaining 0.13% to 84.32. GBP/USD rose 0.01% to 1.6254. During the European session, the U.K. Office for National Statistics said that the annual rate of consumer price inflation in the U.K. remained unchanged at 2.7% in November after an unexpected increase in October, beating out expectations for a dip to 2.6%.

USD/CHF slipped 0.03% 0.9128 while USD/CAD climbed 0.08% to 0.9866. In what represents a departure from recent price action, AUD/USD plunged 0.2% to 1.0514. The pair is still hovering around a year-to-date gain of 6%. NZD/USD slipped 0.32% to 0.8389.

The Dollar Index fell modestly, shedding 0.02% to 79.36. During the U.S. session, the Dollar Index fell to its lowest levels in about two months.