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Dollar Weak amid Hopes for Avoiding Fiscal Cliff

November 29, 2012 at 5:20 by Vladimir Vyun

Ulysses S. Grant on US 50-dollar billThe US dollar erased its yesterday’s gains and remained soft today on hopes that the US politicians will make progress in talks about ways to avoid the fiscal cliff. The dollar was stronger versus the Japanese yen.

Traders were worrying about lack of progress in talks about the fiscal cliff, but now they changed their stance and look into the future with some optimism. Today’s GDP figure is expected to support the positive outlook. Yesterday’s housing data trimmed losses of the dollar as it came out worse than predicted.

The Dollar Index, which tracks the US currency against currencies of six major US trading partners, declined 0.1 percent to 80.272 yesterday. The MSCI Asia Pacific Index of shares advanced 0.6 percent. The resulting lack of demand for safe assets weakened the greenback, but at the same time allowed it to advance versus the yen.

EUR/USD was a little higher from 1.2951 to 1.2953 and GBP/USD ticked up from 1.6012 to 1.6017 as of 5:20 GMT today. Meanwhile, USD/JPY rose from 82.06 to 82.16.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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