Dollar rises as US tries to lessen fiscal cliff impact

<p>The dollar has advanced as US decision-makers try to lessen the impact of the imminent fiscal cliff.</p>

The dollar has made gains in forex trading this morning (November 21st) as the White House and Congress try to come to a conclusion over how to lessen the impact of the fiscal cliff.

Due to hit the world's largest economy in the new year, the fiscal cliff is a parcel of spending cuts and tax hikes that could seriously damage the US if no action is taken to soften the blow.

The estimated effects of the fiscal cliff will cut at least $500 billion (£314 billion) out of the economy, threatening to drive it back into recession.

Chairman of the US Federal Reserve Ben Bernanke has warned the financial event poses a "substantial threat" to the recovery, while he also commented that growth was disappointing in the North American superpower.

At 10:30 GMT, the dollar was higher versus the euro and the pound, advancing by 0.2 per cent in trading with the single currency to $1 buying €0.782 and by 0.1 per cent against sterling to £0.628.

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