Dollar rises as investors fear budget battles on Capitol Hill

Posted On: January 03, 2013

The dollar rose to a three-week high against a number of competing monetary units, as concerns regarding more budget battles in Washington, D.C., drove investors to the world's reserve currency, Reuters reports.

Though lawmakers in the nation's capital were able to avoid going over the fiscal cliff, the agreement that was made left the door open for further negotiations between the two parties.

"We really just kicked the can down the line and we're set up for another flight on the hill in the next month and a half or so," John Doyle, currency strategist at Tempus Consulting in Washington, told the news outlet. "That put a damper on overall risk appetite."

Investors are generally drawn to the greenback during times of market uncertainty, even when this sentiment is related to economic events in the U.S.

Bloomberg News reports that the dollar is expected to make up considerable ground against the shared currency of the European Union this year, with Paul Robson, a senior currency strategist at Royal Bank of Scotland Group Plc in London, noting that the monetary unit will advance to $1.19 per euro. 

Category: Industry News

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