Yen, greenback drop in aftermath of debt deal

Posted On: January 02, 2013

The monetary unit of Japan slipped on Wednesday as a consequence of U.S. political leaders passing legislation that blunts the threat of a fiscal cliff in the globe's largest economy, according to Bloomberg.

So too did the U.S. dollar lose value against higher-yielding monetary units. The Japanese yen dropped to its lowest value against the world's reserve currency since July 2010 after new Prime Minister Shinzo Abe again stated his interest in watering down the value of the yen.

"There's been a relief rally but most people expected the U.S. would come to some sort of a deal so this had been priced in," currency-market analyst Eimear Daly with Monex Europe Ltd. in London told the news source on Wednesday. "Currencies like the Australian dollar have also done very well. Breaking through 87 is a massive deal for dollar-yen."

Republicans committed to resisting the spending cuts preferred by President Barack Obama in exchange for heightening the debt ceiling, which pulled down the Dollar Index to its lowest in about five weeks.

Reuters reports the yen fell to its lowest value in 18 months against the shared currency of the European Union.

Category: Industry News

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