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Forex - EUR/USD falls as markets brace for U.S. debt ceiling turmoil

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Investing.com - The U.S. dollar firmed against the euro on Thursday as investors flocked to the safety of the greenback to see if lawmakers, fresh from steering the U.S. away from the fiscal cliff, can muster the political will to address the country's debt ceiling in the coming weeks.

In U.S. trading on Thursday, EUR/USD was trading down 0.56% at 1.3113, up from a session low of 1.3087, and off from a high of 1.3191.

The pair was likely to find support at 1.3067, the low of December 14 and resistance at 1.3233, the high from Dec. 30.

While Wall Street and Main Street breathed a sigh of relief after the nation's leaders agreed on a plan to avoid the fiscal cliff, concerns rekindled Thursday that partisan brinkmanship will return when lawmakers debate raising the government's USD16.4 trillion debt ceiling, likely in February.

Fears the U.S. will see a repeat of the 2011 debt-ceiling debacle, when lawmakers waited until the last minute to raise the country's borrowing limit, narrowly avoiding default, kept investors parked in the safe-haven greenback despite positive news coming out of the labor market that would otherwise fueled appetite for risk.

Payroll processer ADP said earlier that non-farm private employment rose by a seasonally adjusted 215,000 in December, beating market calls for an increase of 133,000.

November's figure was revised up to a gain of 148,000 from a previously reported increase of 118,000.

Separately, the U.S. Department of Labor reported that the number of individuals filing initial jobless claims during in the week ending Dec. 29 rose by 10,000 to a seasonally adjusted 372,000, compared to expectations for a decline of 7,000 to 355,000, which dampened the ADP's data.

Jobless claims for the preceding week were revised up to 362,000 from a previously reported 350,000.

Meanwhile in Europe, Germany reported earlier that the number of unemployed people in the country rose far less than expected in November, rising by 3,000 after a gain of 5,000 in October.

Analysts had expected the number of unemployed people to rise by 10,000 in November.

Germany's unemployment rate remained unchanged at 6.9% in November, in line with expectations.

The euro, meanwhile, was up against the pound and down against the yen, with EUR/GBP trading up 0.06% at 0.8117, and EUR/JPY trading down 1.07% at 113.95.

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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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