Euro falls against dollar amid fiscal cliff fears

<p>The euro has fallen against the dollar amid fears US lawmakers will not come to an agreement on the fiscal cliff. </p>

The euro was down against the dollar in early trading this morning (December 31st) amid concerns US policymakers will not reach a last-minute deal regarding the fiscal cliff.

Forex trading professionals revealed the single currency declined to US$1.3187, with near-term support seen around US$1.3144, which was the lowest recorded in December, reports Reuters.

The US Congress is set to meet today in a bid to avoid the country falling back into recession as a result of massive tax increases and substantial spending cuts.

However, the fiscal measures will only have a limited impact on the economic situation after many investors priced in very little chance of a deal by the end of 2012.

Michael Sneyd, FX strategist at BNP Paribas, said: "The market seems to have almost taken into account the U.S. fiscal cliff discussions will go into the new year and investors seem to have taken off any risk-on positions before the holiday period."

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