• 
• See all for FXstreet.com
• View Print Version

FXstreet.com (Barcelona) - Market optimism regarding policy maker support soon slumped as US 'fiscal cliff' negotiations ground on, right up to the Jan 1, 2013 deadline. An eleventh hour deal bolstered a year-
end rally. However, "the negotiation process starkly highlighted the difficulties the US government faces as relevant parties appear incapable of compromise. In addition, the cobbled together deal only addresses half of the tabled issues (taxation), leaving the other half (spending) to be grappled with in coming months." warns the BNZ Research Team.

Japanese policy makers also hogged some of December's limelight. In the run up to the mid- December election, leading candidate Abe was verbose in his desire to see more aggressive action from the Bank of Japan, to boost the economy. He proposed a 2% inflation target. At its December meeting the BoJ did make tentative further asset purchases. However, the market moved to price much more aggressive easing ahead. This saw the JPY as the key underperformer for the month. The USD/JPY ended the year at its highest level since July 2010, while the NZD/JPY closed 2012, at 71.87, its highest level since late 2008.

Related Forex and Currencies Articles

• 
  Asian stocks climb to almost 5-year highs; Nikkei up 1.43%
  5/19/2013 08:23 PM
• 
  Forex - USD/JPY falls on yen depreciation concerns
  5/19/2013 07:23 PM
• 
  Forex - AUD/USD higher despite Goldman’s dire call
  5/19/2013 06:23 PM