By TraderVox.com
Tradervox.com (Dublin) – The greenback strengthened against the euro as investors sought haven assets as concerns rose prior to President Barack Obama’s talk with lawmakers on fiscal cliff issues. The dollar Index is headed for a weekly advance for the fourth time in row. The advance has come prior to a report expected to show that US industrial production expanded at a slower pace in October. The Japanese currency has strengthened from six months low against the greenback as speculation that the drop was too rapid increased. The Swiss franc trimmed a weekly advance against the dollar after Thomas Jordan, the Swiss National Bank President, indicated that the currency remains strong and is putting strain on the economy.
According to Michael Derks, the Chief Strategist in London at FXPro Group Ltd, the meeting between Obama and the congressional leaders scheduled for today is unlikely to yield any fruits. He predicted that bids for the dollar will rise as investors avoid risk related currencies. In a situation where the US congress fails to reach an agreement by the end of the year, the $607billion spending cuts and tax adjustment will take effect. This will force the congress to increase the country’s debt ceiling above $16.4 trillion which will be reached early next year.
Obama will be meeting with Democratic and Republican congressional leaders today where they will be discussion fiscal cliff issues. The dollar has advanced by 1.6 percent in October while the yen has dropped by 1.4 percent in the same period.
The greenback rose by 0.3 percent against the euro to trade at $1.2740 per euro at the start of trading in London and increased by 0.2 percent against the yen to exchange at 81 yen. The dollar has pared a 1.9 advance against the yen. It had reached its strongest level against the yen yesterday of 81.46, last seen on April 25.
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