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Dollar Slumps as Fiscal Cliff Averted

January 2, 2013 at 13:29 by Vladimir Vyun

A sheet of US 100-dollar bills up to the horizonThe US dollar sank today after the breakthrough in the negotiations about avoiding the fiscal cliff in the United States, which will allow averting a disaster for the US economy.

US politicians voted for the bill that will allow preventing the automatic tax increases and spending cuts. It is left for President Barack Obama to give a final approval for the deal and he is likely to do so as he has previously said that “while neither Democrats nor Republicans got everything they wanted, this agreement is the right thing to do for our country and the House should pass it without delay”. The news resulted in a rally of almost all currencies, except safer ones. The Dollar Index, on the other hand, slipped 0.4 percent to 79.452 after the 0.6 percent drop — the biggest since November 23.

EUR/USD climbed from 1.3183 to 1.3262 as of 13:29 GMT today and its daily high was at 1.3292. GBP/USD rose from 1.6262 to 1.6292, while its intraday maximum of 1.6337 was highest since August 30.

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