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Dollar, yen down on U.S. fiscal cliff agreement

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Investing.com - The U.S. dollar and the yen were lower against the other major currencies on Wednesday as risk appetite was bolstered after U.S. lawmakers reached a deal to avoid the U.S. fiscal cliff.

During U.S. morning trade, the greenback was hovering close to nine-month lows against the euro, with EUR/USD up 0.48% to 1.3257.

Investor confidence was boosted after U.S. lawmakers passed a compromise bill on Tuesday to avoid the fiscal cliff, blocking a series of looming tax increases and spending cuts that could have pushed the U.S. economy back into a recession.

However, investors remained cautious over the longer term outlook, with negotiations on raising the U.S. debt ceiling still to come in February.

Elsewhere, the dollar was trading close to two-and-a-half-year highs against the broadly weaker yen, with USD/JPY up 0.48% to 87.16.

Investors continued to shun the yen amid ongoing expectations for more aggressive easing measures by the Bank of Japan.

The greenback was close to 16-month lows against the pound, with GBP/USD rising 0.32% to 1.6295.

Sterling found support after data showed that manufacturing activity in the U.K. expanded unexpectedly in December, growing at the fastest pace since September 2011.

The Markit U.K. manufacturing purchasing managers' index came in at 51.4, from an upwardly revised reading of 49.2 in November. Analysts had expected the manufacturing PMI to remain unchanged.

The greenback was trading close to eight-month lows against the Swiss franc, with USD/CHF down 0.32% to 0.9122.

The greenback was sharply lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD dropping 0.82% to 0.9841, AUD/USD jumping 1.14% to 1.0513 and NZD/USD rallying 0.97% to trade at 0.8366.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.40% to 79.57.

The dollar was little changed after data showed that manufacturing activity in the U.S. expanded at a faster rate than expected in December.

The Institute for Supply Management said its index of purchasing managers rose to 50.7, up from 49.5 in November, compared to expectations for a reading of 50.3.

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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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