Euro eases but supported by U.S. fiscal hopes
The euro eased against the dollar on Thursday, but its losses were limited after comments from U.S. policymakers rekindled hopes for a deal to avoid a sharp fiscal tightening that could hurt the global economy. For the moment, the U.S. fiscal cliff seems to be a dominant theme in the market.
Wall Street posted strong gains and Asian equities advanced overnight after U.S. House of Representatives Speaker John Boehner voiced optimism that Republicans could broker a deal with the White House to avoid a year-end ‘fiscal cliff’ of austerity measures that could stall the world’s largest economy. President Barack Obama added to the positive mood, saying he hoped to get a deal done in the next four weeks.
German unemployment climbed for an eighth straight month in November as Europe ’s debt crisis curbed company investment and economic growth. The number of people without a job increased by a seasonally adjusted 5,000 to 2.94 million, the Federal Labor Agency in Nuremberg said today. With the euro area in recession and growth slowing in markets, German firms are postponing investment and hiring decisions.
In the FX market, the Euro seems to be gaining against the dollar and pound. GBPEUR is currently trading at a range of 1.2337 – 1.2374.
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