The euro gained even as unemployment in the eurozone’s largest economy rose, amid a risk-positive mood in the currency markets on Thursday as optimism prevailed over ongoing fiscal cliff negotiations in the US. The shared currency gained 0.2 per cent to trade just below $1.30, even as figures showed that German unemployment rose for the eighth month in a row in November. However, the unemployment rate was in line with expectations at 6.9 per cent. The dollar was weaker against most other major currencies ahead of fresh talks on ways to resolve the US’s upcoming tax hikes and spending cuts set to take place in January. The UK pound rose 0.1 per cent to $1.6028 while the dollar fell 0.2 per cent against the Swiss franc to SFr0.9270. The yen also fell back after strengthening the previous day on haven demand. The dollar rose more than 0.1 per cent to Y82.23. An exception to the risk-positive mood was the Australian dollar, which fell after expectations for new private capital expenditure (Capex) in the Australian economy next year were downgraded. Figures for the third quarter showed a surprise rise in capex expenditure in Australia. But the statistics bureau warned that a drop in Australia’s mining capex next year would help to lower spending. The figures increased speculation that the Reserve Bank of Australia will cut interest rates from the present 3.25 per cent when it meets next week. “We believe that the RBA will continue cutting rates, undermining the Australian dollar via lower interest rate differentials,� said analysts at Morgan Stanley. The Australian dollar fell more than 0.1 per cent to $1.0449. Currency analysts also suggested that moves into haven currencies earlier in the week were in part due to technical levels on a number of key currency pairs rather than economic or political developments. “What has really driven the correction were overstretched levels in a bunch of markets and with a healthy slowdown in the pace of the move, we are in better shape today,� said Kit Juckes, foreign currency strategist at Société Générale.

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