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Dollar remains broadly lower vs. rivals ahead of U.S. data

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Investing.com - The U.S. dollar remained broadly lower against the other major currencies on Thursday, ahead of U.S. economic reports as hopes U.S. officials will manage to find a deal to avoid a fiscal crisis supported demand for riskier assets.

During European afternoon trade, the dollar was lower against the euro, with EUR/USD climbing 0.41% to 1.3278.

Market players remained focused on developments surrounding the fiscal cliff in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1.

President Barack Obama was to end his vacation and return to Washington on Thursday in order to take part in talks to avert the crisis ahead of the year-end deadline. Both chambers of Congress are also due to return to work on Thursday.

Without a deal, the U.S. could fall back into recession and drag much of the world down with it.

In addition, U.S. Treasury Secretary Tim Geithner said Wednesday that the USD16.4 trillion debt ceiling limit will be hit on December 31. Geithner added that "accounting measures" will be taken to create "headroom" in order to delay a technical violation.

The temporary moves would create USD200 billion in "headroom," enough to last for approximately two months under normal circumstances.

The greenback was also lower against the pound, with GBP/USD adding 0.20% to 1.6169.

Earlier in the day, industry data showed that mortgage approvals in the U.K. rose less-than-expected in November, increasing by 33,600 after a 33,100 rise the previous month. Analysts had expected mortgage approvals to rise by 34,600 in November.

Elsewhere, the greenback was higher against the yen, with USD/JPY edging up 0.20% to trade at 85.80, but lower against the Swiss franc, with USD/CHF dropping 0.39% to 0.9098.

The yen remained close to multi-month lows against the dollar after Shinzo Abe was formally approved as Japan's prime minister by the lower house of parliament on Wednesday. Abe has recently called for unlimited easing by the Bank of Japan in order to weaken the local currency and spur growth in the recession-hit economy.

Earlier Thursday, new Finance Minister Taro Aso said that Abe has ordered him to compile a stimulus package without adhering to a previously agreed cap on new bond issuance, while new Economics Minister Akira Amari said the yen was heading toward appropriate levels with its recent weakening, and that it was important to maintain the downward trend.

The greenback was steady to lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD slipping 0.29% to 0.9915, AUD/USD inching 0.04% higher to 1.0382 and NZD/USD was flat, trading at 0.8198.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.31% to 79.46.

Later in the day, the U.S. was to publish its weekly government report on initial jobless claims, as well as data on new home sales and consumer confidence.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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