Mixed Week for Dollar Ahead of Year-End

The US dollar had mixed performance this week. There was no particularly important news as markets were quiet amid the holiday season and currencies were moving without specific direction for the most part. The notable exception was the Japanese yen, which continued to weaken on intervention speculations.
Without anything new, the potential fiscal cliff in the United States remained the major theme that moved the Forex market. It had vastly different impact on various currencies. Some currencies were rising amid hopes that the crisis can be avoided, while others suffered from fears that the US economy will enter recession.
The yen demonstrated a stable decline, even though it has climbed by the end of the last week. It looks like the government is very serious about bolstering the economy and fundamentals suggested that Japan’s economy indeed requires aid.
EUR/USD was up from 1.3180 to 1.3214 this week and its weekly high was at 1.3282. GBP/USD closed flat at 1.6165, while during the week it has fallen as low as 1.6064. USD/JPY jumped from 84.21 to 86.07 and its weekly maximum of 86.62 was the highest price since August 2010.

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