Political leaders in the globe's largest economy agreed on a deal that settled the fiscal cliff debacle, but also pulled down the value of the U.S. dollar and the Japanese yen, according to Bloomberg.
The eleventh-hour agreement between President Barack Obama and Republican counterparts staves off the automatic application of more than $600 billion in tax hikes and spending cuts that was set to begin with the dawning of the new year without an agreement. The yen fell to its lowest in roughly 30 months against the greenback in the aftermath of new Prime Minister Shinzo Abe underscoring his interest in lowering the value of the yen.
"This is a typical risk-on market where the yen and dollar are sold," senior global markets analyst Satoshi Okagawa with Sumitomo Mitsui Banking Corporation in Singapore told the news source on Wednesday. "The cliff is behind us for now."
Negotiations between Republicans and Obama prompted the Dollar Index to drop to its lowest in roughly five weeks.
The yen sank to its lowest in 18 months against the common currency of the European Union, according to Reuters.
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