Investing.com - The U.S. dollar traded lower against most of its major rivals in Asian trading Monday, indicating that even the safest of safe havens may come under some pressure if U.S. policymakers fail to make rapid, dramatic progress toward solving the fiscal cliff.
In Asian trading Monday, EUR/USD gained 0.08% to 1.3227. The pair was likely to find support at 1.3166, Friday's low, and resistance at 1.3284, Thursday's high.
With several of Asia's major bourses closed until the new year, volumes were thin as many investors already closed books to lock in profit before the end of the year, reducing liquidity in the market and increasing the volatility.
Elsewhere, USD/JPY added 0.02% to 85.91. USD/JPY soared last week as new Japanese Prime Minister Shinzo Abe stepped his inflation and monetary easing rhetoric. The pair was likely to find support at 84.77, Tuesday's low, and resistance at 86.63, Thursday's high.
USD/CHF fell 0.1% to 0.9127 while USD/CAD slid 0.21% to 0.9950 despite a modest decline for oil futures in the early part of Monday's Asian session. GBP/USD was flat at 1.6163.
With U.S. stocks in the midst of a five-day losing streak, the dollar has a chance to rally on fiscal cliff headlines. During a press interview Sunday, President Obama said financial markets would be adversely impacted if Congress fails to craft a fiscal cliff resolution prior to the Tuesday deadline. Obama said his top priority to ensure that taxes on middle-class Americans do not go up.
Obama's tone regarding a fiscal cliff resolution remains optimistic, but time is running short. Congress recessed for the evening, but pledged to reconvene later today. However, little headway was made towards resolving the GDP-draining fiscal cliff Sunday, giving policymakers less than two days with which to work.
Traders will also have their eyes on Friday's non-farm payroll report, which will highlight the U.S. jobs scenario for December. The world's largest economy currently has an unemployment rate of 7.7%.
Indicating that risk appetite has not collapsed entirely, AUD/USD jumped 0.25% to 1.0399 while NZD/USD surged 0.52% to 0.8242.
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