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Forex - Dollar lethargic in Asian trade as more fiscal debate looms

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Investing.com - The U.S. dollar was seen mixed against the other major currencies in Monday's Asian session, swinging between gains and losses as traders pondered the greenback's next move ahead of more fiscal policy debate in the U.S.

In Asian trading Monday, EUR/USD fell 0.1% to 1.3056. The pair was likely to find support at 1.2999, Friday's low, and resistance at 1.3299, Wednesday's high.

Elsewhere, GBP/USD lost 0.09% to 1.6057. The pair was likely to find support at 1.6010, Friday's low, and resistance at 1.6381, Wednesday's high.

Monetary policy announcements are expected later this week from the Bank of England and the European Central Bank.

After surging to a two-and-a-half year high against the yen on Friday amid expectations the Bank of Japan will engage in additional monetary easing, USD/JPY was lower by 0.17% at 88.01. The pair was likely to find support at 86.54, Wednesday's low, and resistance at 88.40, Friday's high.

While the U.S. fiscal cliff debate has been put to bed, policymakers in the world's largest economy must now turn their attention to addressing the debt ceiling. The debt ceiling refers to the amount of debt the U.S. can carry at any given time and if it is not raised, riskier assets could be punished as another downgrade to the U.S. credit rating becomes probable.

Following the contentious fiscal cliff debate, markets may be anticipating more of the same when it comes to the debt ceiling. Congressional Republicans have already signaled they will not move forward with a debt ceiling plan unless they secure a commitment from President Obama to significantly reduce government spending.

The last time the debt ceiling dominated the headlines, Standard & Poor's lowered the U.S. sovereign debt rating to AA+ from AAA, the highest rating possible.

Meanwhile, USD/CAD was flat at 0.9875 while USD/CHF gained 0.12% to 0.9259. AUD/USD was also flat 1.0481 while NZD/USD slipped 0.19% to 0.8302. The U.S. Dollar Index added 0.04% to 80.64.

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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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