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Dollar pares some of its losses after U.S. Q3 GDP, budget talks eyed

Publish Date29/11/2012 02:09:42 PM

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The dollar pared some of its losses against majors after the release of U.S. third quarter GDP report, ahead of critical meeting between Treasury Secretary Geithner and congressional leaders to negotiate the so-called fiscal cliff.

The world`s no.1 economy grew an annualized 2.7% in the third quarter from an initial of 2.0% and forecasts of 2.8%. Another report showed that initial jobless claims retreated to 393,000 in the week ended Nov. 24 from a revised of 416,000.     

However, the main focus in markets is on the fiscal cliff with some optimism after U.S. house speaker John Boehner said lawmakers could reach an agreement that would avoid the sharp spending cuts and tax increases worth $607 billion set to take effect from January.

Today, Geithner will meet separately with each of the four top leaders in Congress to come out with a strong solution that will probably watering down the cliff on several years.   

The green currency snapped some of the losses against a basket of major currencies as the dollar index rose from a low of 80.08 to hover around 80.15.

The EUR/USD pair remained firm on the daily basis, especially after the release of upbeat European confidence and a successful long-term bond selling by Italy, yet it retreated from a high of 1.2998 to trade around 1.2985, compared with the day`s opening of 1.2951.  

A report from the euro area released on Thursday signaled that economic confidence rebounded to 85.7 in November, from a revised of 84.3, compared to estimates of 84.5.  

On the other hand, Italy`s 10-year yield slipped to the lowest level in two years at today`s bond auction which witnessed the raise of 2.98 billion euros by the Treasury.  

The trading range for today is among key support at 1.2760 and key resistance at 1.3110.

Against the yen, the dollar pared its earlier drop to trade near the day`s opening around 82.07 after touching a high of 82.20 and a low of 81.99.  

The trading range for today is among key support at 81.25 and key resistance now at 83.20.

As for the sterling pound, it rose against the greenback amid the absence of fundamentals from the U.K. as it followed the general sentiment in the market which is fueled with some optimism that U.S. lawmakers would reach a deal to avert the fiscal cliff.

The GBP/USD is meanwhile trading around 1.6038 from the day`s opening of 1.6016, where the trading range for today is among key support at 1.5820 and key resistance at 1.6180.









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