Investing.com - The euro was trading close to session highs against the U.S. dollar on Tuesday, as concerns over the U.S. fiscal cliff subsided, supporting investor demand for the single currency.
EUR/USD hit 1.3190 during U.S. morning trade, the pair's highest since May 2; the pair subsequently consolidated at 1.3182, gaining 0.14%.
The pair was likely to find support at 1.3065, Friday's low and near-term resistance at 1.3187, Monday's high and a five-month peak.
Negotiations aimed at avoiding automatic tax hikes and spending cuts which investors fear could derail the U.S. recovery, have intensified in recent days, raising hopes that U.S. lawmakers will reach an agreement by the January 1 deadline.
In the euro zone, Spain saw Spain saw borrowing costs decline at an auction of three- and six-month government bonds earlier Tuesday, as signs of progress in tackling the euro zone's debt crisis supported sentiment.
The euro was almost unchanged against the pound, with EUR/GBP dipping 0.01% to 0.8122 and was trading close to eight-month highs against the weaker yen, with EUR/JPY up 0.26% to 110.70.
The yen remained under broad selling pressure after an election victory for Japan's Liberal Democratic Party fuelled expectations for more aggressive monetary easing steps by the Bank of Japan.
In the U.S., official data showed that the current account deficit narrowed to USD107.53 billion in the third quarter, from USD118.1 billion in the previous quarter, the lowest level since 2010.
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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.
