The dollar is currently trading mixed against its major competitors Monday. The U.S. currency jumped higher after the results of the Japanese election, but those early gains have since eroded. The dollar is losing ground against the pound sterling and is largely unchanged in comparison to the Euro.
The fiscal cliff negotiations have become the main focus of investors, as the end of the year approaches. There were positive developments in the negotiations over the weekend. House Speaker John Boehner proposed raising the top rate for earners making more than $1 million or more. President Obama, however, wants a tax increase on anyone earning over $250,000.
President Obama and Boehner also held a surprise meeting today, to further discuss the issue.
The Opposition Liberal Democratic Party, which supports more economic stimulus, returned to power in Japan with an overwhelming victory in Sunday's parliamentary election, putting an end to a three-year tumultuous rule by the Democratic Party of Japan.
The buck leaped to an 8-month high of Y84.335 against the Japanese Yen early Monday, but has since retreated to around Y83.720.
Next year will be a period of low growth for French economy as well as for the entire Europe, French Finance Minister Pierre Moscovici said in an interview to le Journal du Dimanche on Sunday.
The year 2012 was "particularly difficult" and 2013 will be "another very difficult year", he told the French daily. Still the country can achieve the growth target of 0.8 percent next year, he said.
The European Union leaders have agreed on a roadmap for the completion of the Economic and Monetary Union, besides a deal for closer banking sector union.
"This process will begin with the completion, strengthening and implementation of the new enhanced economic governance, as well as the adoption of the Single Supervisory Mechanism and of the new rules on recovery and resolution and on deposit guarantees," the European Council said in a statement after the conclusion of the two-day EU summit on Friday.
The dollar has been trading in a range against the Euro on Monday, hovering around the $1.3160 level, which is basically flat with the 3-month low of $1.3172 it reached on Friday.
Eurozone exports declined for the second consecutive month in October, suggesting little support to the economy from foreign demand at a time when domestic consumption is restrained by government spending cuts and high unemployment.
Exports slipped by a seasonally adjusted 1.4 percent from a month ago, when it dropped 1.3 percent, a report published by Eurostat showed Monday. Imports, on the other hand, grew only 0.6 percent, following a 3 percent drop in August.
On an unadjusted basis, the merchandise trade showed a surplus of EUR 10.2 billion in October, which was larger than a surplus of EUR 9.5 billion recorded in September. Economists had forecast the surplus to fall to EUR 9 billion.
Labor costs in the euro area increased at a steady pace in the third quarter, data released by statistical office Eurostat showed Monday.
The labor cost index, which measures costs of labor on an hourly basis, increased a working-day adjusted 2 percent on an annual basis in the third quarter, after rising 1.9 percent in the second quarter and 1.6 percent in the first quarter.
Germany's manufacturing employment increased from last year in October, data released by the Federal Statistical Office showed Monday. Employment in German manufacturing units with 50 or more employees increased 1.7 percent on an annual basis to around 5.25 million in October.
An indicator of French economic activity declined in October after moderate increases throughout the third quarter of 2012, the Conference Board said in a report on Monday. The leading economic index fell 0.5 percent month-on-month in October to 114.4. Meanwhile, the coincident index, that measures the current economic activity, decreased 0.1 percent to 103.9.
The greenback has extended Friday's weakness against the pound sterling and has reached a 2 1/2 month low of $1.6216.
House prices in the U.K. posted the steepest decline on record in December, but remained 1.4 percent higher than a year earlier in 2012, a survey by Rightmove showed Monday.
New seller asking prices fell 3.3 percent month-on-month in December to GBP 228,989. This was the largest decrease ever recorded by Rightmove. In November, prices were down 2.6 percent after 3.5 percent jump in October.
Manufacturing activity unexpectedly declined in the New York region for the fifth consecutive month, according to the latest figures from the New York Federal Reserve.
The New York Fed's manufacturing index fell to negative 8.1 in December from negative 5.2 in November. Analysts were looking for a slightly positive reading, but factories remained relatively quiet a month after Hurricane Sandy.
by RTT Staff Writer
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