The dollar and yen remained stronger against most major peers as investors sought safety amid concern re-elected President Barack Obama and the U.S. Congress will struggle to avert the so-called fiscal cliff.
The greenback remained weaker against the Japanese currency after Obama’s victory over Republican challenger Mitt Romney boosted expectations the Federal Reserve will maintain monetary stimulus. The euro traded near a two month-low ahead of a European Central Bank meeting today after President Mario Draghi said Europe’s debt crisis is affecting Germany. A report today is forecast to show exports in Europe’s largest economy declined in September.
“The biggest focus of the market as we head into year-end will be the fiscal cliff in the U.S.,” said Noriaki Murao, New York-based managing director of the marketing group at the Bank of Tokyo-Mitsubishi UFJ Ltd., referring to the $607 billion in tax increases and spending cuts set to be implemented in 2013 unless Congress acts. “Investors are buying safe currencies such as the dollar and yen.”
The dollar traded at $1.2762 per euro as of 8:26 a.m. in Tokyo from $1.2771 yesterday, when it touched $1.2737, the strongest since Sept. 7. The U.S. currency slid 0.1 percent to 79.94 yen after declining 0.4 percent yesterday. The euro was at 102.02 yen, having dropped 0.8 percent to 102.16 yesterday.
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