Dollar slides as fiscal cliff stalemate continues

<p>The dollar has lost ground as fiscal cliff talks lead to a stand-off over taxing the wealthy.</p>

The dollar has lost ground in forex trading this morning (December 3rd) as US Treasury secretary Timothy Geithner and House speaker John Boehner continue their impasse over a fiscal cliff deal.

In January 2013, the US is set to be hit by a parcel of tax hikes and government spending cuts known as the fiscal cliff, which will seriously damage the nation's economic recovery unless a deal can be brokered between the president and Congress to avoid the full impact of the fiscal measures.

Yesterday, Mr Geithner said no agreement would be reached unless the Republicans accept a tax rise for the wealthy.

Mr Boehner dismissed a ten-year plan aiming to raise $1.6 trillion (£1 trillion) through such levies and spending cuts.

The fiscal cliff as it stands looks set to knock $600 billion out of the world's largest economy.

At 09:50 GMT, the dollar depreciated by 0.4 per cent in trading with the euro to $1 buying €0.766, while versus the pound it lost 0.2 per cent to £0.623.

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