Yen, dollar rise on safety demand as U.S. House scraps tax vote

Deficit Talks

Political leaders in Washington are debating how to avoid the so-called fiscal cliff, the more than $600 billion in automatic tax increases and spending cuts that will take effect in January unless Congress acts.

Boehner, an Ohio Republican, said in a statement yesterday his tax measure “did not have sufficient support from our members to pass.” A House leadership announcement said the chamber will hold no more votes until after the Christmas holiday and will return “when needed.”

The speaker said he will call President Barack Obama, according to Representative Steven LaTourette of Ohio.

Australia’s currency slid as much as 0.6 percent to $1.0417, the least since Dec. 4, while New Zealand’s dropped 1.3 percent to 82.32 U.S. cents.

The Standard & Poor’s 500 Index slid 0.8 percent.

Trend Lines

“We’re seeing some correction of recent trends,” said Ian Stannard, head of European currency strategy at Morgan Stanley in London. “Going into year-end with continued uncertainty on the U.S. fiscal front means we’re likely to see some caution in the market. However, we are expecting there to be some sort of agreement in place by the end of the year to reassure markets.”

Monti will tender his resignation to Italian President Giorgio Napolitano today after Parliament approves budget legislation. The Cabinet is scheduled to meet at 7 p.m. in Rome, news agency Ansa reported.

The prime minister said Dec. 8 that he intended to resign because former Premier Silvio Berlusconi’s party withdrew support for his government.

“His departure is something that’s going to weigh on the euro,” Eric Viloria, senior currency strategist for Gain Capital Group LLC in New York, said in a telephone interview. “He’s done a good job as prime minister in terms of trying to implement austerity measures and get the fiscal house in order there.”

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