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Euro continues push against dollar despite budget deal

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(Globalpost/GlobalPost)

The euro pushed up against the dollar Wednesday for the fourth straight session despite a US budget deal that gave the Federal Reserve more reason for cutting stimulus.

At 2200 GMT the euro was trading at $1.3785, compared to $1.3760 late Tuesday.

The dollar fell to 102.40 yen from 102.81, while the euro fell to 141.19 yen from 141.48.

Late Tuesday Democrat and Republican negotiators agreed on a two year budget plan, reducing scheduled budget cuts that would hit growth and avoiding another government shutdown as seen in October.

Analysts said that was a positive for growth, giving the Fed -- which has expressed concern over Washington's repeated policy brinksmanship -- less reason to hold tight to the $85 billion a month asset purchase program.

If the Congress ratifies the deal, said S&P's chief US economist Beth Ann Bovino, "we would expect the US economy to grow faster in 2014."

"The tentative deal also supports our expectation that the Federal Reserve may start to reduce bond purchases this month."

US bond yields jumped after the deal, the 10-year Treasury rising to 2.84 percent from 2.80 percent.

But a preference for more risk kept players in the euro, amid expectations the eurozone is turning around after Italy pulled out of a two-year recession and Prime Minister Enrico Letta won a parliamentary confidence vote.

The British pound slipped after strong recent gains on the dollar, falling to $1.6374 from $1,6442. The dollar dropped to 0.8863 Swiss franc from 0.8871 franc.

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http://www.globalpost.com/dispatch/news/afp/131211/euro-continues-push-against-dollar-despite-budget-deal