The dollar rose the most in a week against the euro as concern U.S. lawmakers will fail to avert the so-called fiscal cliff of more than $600 billion of tax increases and spending cuts spurred demand for safer assets.
The U.S. currency strengthened against most of its 16 major counterparts before President Barack Obama meets Democratic and Republican congressional leaders today as a year-end budget deadline approaches. The yen earlier fell to a 28-month low versus the dollar after Japanese consumer prices and factory output declined, fueling speculation the central bank will heed government calls to step up stimulus to end deflation.
The dollar gained 0.4 percent to $1.3187 per euro at 9:41 a.m. in London, the biggest gain since Dec. 21. The yen was little changed at 86.02 per dollar after depreciating as much as 0.6 percent to 86.64, the weakest level since Aug. 3, 2010. The euro dropped 0.5 percent to 113.43 yen.
The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six U.S. trading partners, gained 0.3 percent to 79.816. The gauge rose 0.2 percent this week.
U.S. House Republican leaders announced the chamber will meet on Dec. 30 -- the first Sunday session in more than two years. Obama, who had been negotiating one-on-one with House Speaker John Boehner, will meet today with Republicans Boehner and Senate Minority Leader Mitch McConnell, and Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi, both Democrats. (Bloomberg)
