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Forex- AUD/USD modestly lower on cliff concerns
Investing.com - The Australian dollar fell slightly against its
U.S. rival in Monday's Asian session as traders departed riskier
assets on the back of lingering fiscal cliff concerns.
In Asian trading Monday, AUD/USD fell 0.03% to 1.0399. That is where the pair closed at in Friday's U.S. session after earlier touching its lowest levels in nearly three weeks. The pair is likely to find support at 1.0375, the low from November 23 and resistance at 1.0485, Friday's high.
Indicating that the Aussie dollar's move against its U.s. counterpart are more beholden to fiscal cliff headlines than any other near-term issue, the former did not get a lift despite some positive news regarding Australia's own budget.
Trade minister Craig Emerson said in a media interview that Australia could return to a budget surplus for fiscal 2014. Last week, Treasurer Wayne Swan said it was unlikely Australia would accomplish the goal of a fiscal 2013 surplus due to weakness in the country's mining sector, which has adversely impacted tax revenue.
Emerson went so far as to not rule out the possibility of a 2012-2013 budget surplus, but those bullish comments were not enough to support the Aussie dollar against the greenback in Asian trading Monday.
Rather, traders focused more on the fiscal cliff and the small window of time left for U.S. lawmakers to dodge the budget crisis.
At this point, it appears that the White House is willing to accept a small deal to avert the tax increases from going into effect on January 1, 2013. However, the caveat is that the President wants the small deal to set the stage for broader budget talks in the new year.
Congress is expected to come back into session Thursday December 27, leaving policymakers little time in which to strike any deal to avert the fiscal cliff. The deadline is January 1, 2013. Should that deadline be missed, scores of previously enacted tax cuts will become tax increases.
Elsewhere, AUD/JPY jumped 0.1% to 87.77 while EUR/AUD was flat 1.2676. AUD/NZD was flat at 1.2638.
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