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Euro down on US dollar on future budget fears

SINGAPORE--The euro fell against the U.S. dollar in Asia Thursday as euphoria over the U.S. fiscal cliff deal gave way to concerns about future budgetary rows in Washington.

The single currency bought US$1.3142 in afternoon Asian trade from US$1.3184 in New York late Wednesday, while it was also at 114.55 yen from 115.13 yen.

The greenback traded at 87.15 yen from 87.32 yen.

The U.S. dollar lifted against the European unit as doubts emerged over the 11th-hour deal reached Wednesday to prevent the huge tax hikes and spending cuts kicking in that would have likely sent the economy into recession.

“Currency traders may be positioning themselves for the troubles that lie ahead for the U.S. economy as Congress confronts spending cuts in two months' time,” IG Markets said in a report.

“Investors realized that the fiscal problem is far from over as the debate on raising the debt ceiling looms ... we expect an uglier showdown than the tax issue,” Phillip Futures stated in their own report.

The U.S. dollar was mixed against Asia-Pacific currencies. It rose to 1,064.37 South Korean won from 1,064.24 won on Wednesday, to SG$1.2221 from SG$1.2207 and to 9,645 Indonesian rupiah from 9,630 rupiah.

However, it fell to 30.37 Thai baht from 30.55 baht and to 40.82 Philippine pesos from 40.90 pesos. The greenback was unchanged at 54.49 Indian rupees.

The Australian dollar bought US$1.0491 from US$1.0464 while China's yuan was at 13.99 yen from 13.98 yen.

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