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Australian Dollar Declines On Fiscal Cliff Concerns

The Australian dollar slipped against most major opponents in the Asian session on Thursday as continued concerns about U.S. fiscal cliff prompted traders to reduce high-yielding assets.

President Barack Obama headed back to Washington by cutting short his holidays in Hawaii in order to reach a deal to avoid "fiscal cliff".

With just few days left, lawmakers are still at odds on how to reach budget agreement before the year-end deadline. Unless an agreement is reached, approximately $600 billion in automatic tax increases and government spending cuts are due to go into effect at the end of the year.

The aussie lost 0.35 percent against the euro to reach 1.2793, its lowest level since October 8. The next downside target level for the aussie is seen at 1.285. The pair closed Wednesday's deals at 1.2748.

Against the U.S. dollar, the aussie slipped 0.30 percent to 1.0348, compared to yesterday's close of 1.0379. On the downside, the aussie is likely to break 1.03 level.

The aussie that pared early gains against the Canadian dollar fell to a 3-day low of 1.0275. The aussie may seek next support level at 1.02. At yesterday's close, the pair was worth 1.0322.

The Australian currency dropped to 1.2625 against the kiwi with 1.257 seen as the next support level. The aussie-kiwi pair was quoted 1.2663 at yesterday's close.

In the European session, Swiss UBS consumption indicator and U.K. mortgage approvals for November are slated for release.

The U.S. weekly jobless claims for the week ended December 22, consumer confidence index for December and new home sales for November are likely to influence trading in the New York session.

by RTTNews Staff Writer

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