The EURO Loses its Shackles

Just when you thought that short EUR position you had been carry was about to strike big, along comes a few US politicians to throw yet another curve ball.

The US fiscal cliff is again capturing the markets attention, as investors look for signs of an imminent resolution to the tax hikes and spending cuts that are scheduled to hit the US in a matter of weeks. The prospect of a compromise on the US deficit strategy has boosted global equities and the vulnerable EUR against the dollar, while also giving oil and commodity prices a lift.