Dollar Weakens as Obama Extends Tax Cuts

The US dollar weakened today as the investors’ demand shifted from the safer currencies to the higher-yielding ones after the US President Barack Obama said he’s going to sustain the tax cuts.

The middle-class tax cuts, introduced by the administration of George W. Bush, were set to increase on December 31st. The news about prolonging of the tax cuts spurred the markets: the MSCI World Index of stocks went up 0.4 percent and the Stoxx Europe 600 Index gained 0.7 percent. The Dollar Index slipped 0.2 percent to 79.418.

EUR/USD went up from 1.3306 to 1.3361 as of 11:42 GMT today. USD/JPY traded at 82.60 after it opened at 82.66 and dropped to 82.32.

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