The U.S. Dollar edged lower during the Asian trading session as it appears that a last minute agreement between President Obama and the U.S. House of Representatives might at last be on the horizon. At stake is $600 billion in various spending cuts and tax increases that would hit the fragile economy hard and send it into a recession, an event which would be perceived as a threat to the global economy overall. An upcoming vote in the House will cement the deal and stave off the threat.
As reported at 11:16 a.m. (JST) in Tokyo, the U.S. Dollar Index retreated 0.4% to 79.466 .DXY versus a weighted group of major currencies; the U.S. Dollar Index is considered a good gauge of the greenback’s strength relative to other currencies. The AUD/USD pair edged 0.6% higher to $1.0463; the Aussie Dollar is a commodity-linked currency that improves when the global outlook does. One global markets specialist in Singapore believes that risk on sentiment will now improve as concerns over the fiscal cliff deal fade. The other safe have currency, the Japanese Yen, also retreated broadly with the USD/JPY pair dropping to 86.970 Yen, a price unseen since July 2010.
Fiscal Cliff Concerns Fade
Barbara Zigah