Euro hits 7-month high vs dollar on budget hopes

AP News
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Posted: Dec 18, 2012 2:08 PM

NEW YORK (AP) — Hopes that U.S. lawmakers are closer to a budget deal are pushing the euro to a seven-month high against the dollar.

Risker currencies, such as the euro, tend to rise when traders think the economy is getting better.

The euro rose to $1.3232, its highest point against the dollar since May 2. It was worth $1.3160 Monday.

Traders have been worried about the U.S. "fiscal cliff," a series of tax increases and government spending cuts set to kick in at the beginning of next year unless the White House and Congress reach an agreement on reducing the budget deficit.

On Tuesday, House Speaker John Boehner says he's hopeful a deal can be reached.

The British pound rose to $1.6253 from $1.6203.

The dollar rose to 84.10 yen from 83.83 yen.