Dollar remains steady to lower amid "fiscal cliff" jitters

Shutterstock photo - The U.S. dollar remained steady to lower against the other major currencies on Monday, although concerns that U.S. officials will not manage to agree on a deal to prevent a fiscal crisis by the end of the year lent some support to the safe haven greenback.

During European afternoon trade, the dollar was lower against the euro, with EUR/USD rising 0.20% to 1.3217.

Markets were jittery as investors continued to monitor 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.

Doubts over whether a deal will be reached ahead of the year-end intensified late Thursday after House Speaker John Boehner pulled his so-called "Plan B" fiscal cliff option, which called for tax increases only on Americans earning USD1 million or more per year, because his Republican colleagues did not support the legislation.

The U.S. House has adjourned for the Christmas holiday, fueling speculation that policymakers will not be able to avert the fiscal cliff. Without a deal, the U.S. could fall back into recession and drag much of the world down with it.

Adding to concerns, Italian Prime Minister Mario Monti tendered his resignation after only 13 months in office, paving the way for a highly uncertain national election in February.

The greenback was steady against the pound, with GBP/USD dipping 0.02% to 1.6165.

Elsewhere, the greenback was higher against the yen, with USD/JPY rising 0.24% to trade at 84.46, but lower against the Swiss franc, with USD/CHF slipping 0.29% to 0.9133.

The greenback was steady against its Canadian, Australian and New Zealand counterparts, with USD/CAD easing 0.05% to 0.9927, AUD/USD inching 0.05% lower to 1.0396 and NZD/USD slipping 0.09% to 0.8223

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.12% to 79.54.

Trading volumes were expected to remain light because many traders have closed books to lock in profit before the end of the year, reducing liquidity in the market and increasing the volatility. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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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.

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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