Dollar Weakens In Quiet Session Ahead Of New Year

Washington (Dec 30)  The dollar eased from two-year highs against the euro Tuesday in the absence of much first-tier economic data.

With many traders away from their desks between Christmas and  New Year's  , focus has shifted toward political turmoil in  Greece  and the potential impact on the euro.

The failure of  Greece's  ruling coalition to win enough votes to elect a new head of state has triggered new elections scheduled for  January 25  .

A win by leftist parties could mean that  Greece  scales back its austerity measures to the chagrin of other euro zone members, particularly  Germany  .

The dollar softened to 1.2150 versus the euro after touching a 28-month peak near  USD1.21  .

Gradual losses took the dollar to  USD1.5570  versus the sterling, away from a yearly high near  USD1.55  .

The buck also lost ground against the yen, sliding below  Y120  . The buck is up more than 13% on-year versus the slumping yen.

The  Japan  government approved a stimulus package worth  USD29 billion  in its latest attempt to bring the economy back into track that slipped into recession in the third quarter.

The package focuses on providing subsidized heating fuel for poor households, supporting small firms with low cost funding and distributing purchase coupons to lift consumption. These measures are expected to boost the real gross domestic product by 0.7%.

After reporting an unexpected deterioration in US consumer confidence in the previous month, the Conference Board released a report on Tuesday showing that its consumer confidence index rebounded in the month of December.

 The Conference Board  said its consumer confidence index climbed to 92.6 in December from an upwardly revised 91.0 in November.

Economists had expected the index to jump to a reading of 93.0 from the 88.7 originally reported for the previous month.

Source: AllianceNews