-The dollar firmed on Friday as investors sought safety after US budget negotiations to avert spending cuts and tax increases took a turn for the worse, fuelling concerns the United States could slide into recession. The demand for the most liquid currencies, including the dollar and the yen, grew at the expense of growth-linked currencies such as the euro and Australian dollar after a budget plan by the Republican speaker of the House of Representatives, John Boehner, failed to win support from his party.

Boehner, in a news conference on Friday, said it is now up to Obama and his fellow Democrats in Congress to reach a solution to the fiscal cliff. The dollar index rose 0.4 percent to 79.611. Near-term resistance at the 200-week moving average of around 79.50 was breached as the greenback's rally gathered pace. The euro was down 0.5 percent at $1.3172, its worst daily showing in two weeks.

The dollar was down 0.3 percent at 84.14 yen, below its recent 20-month high of 84.62 yen. The yen also rose against the euro, with the single currency down 0.8 percent at 110.81 yen. The Australian dollar fell to US $1.0410, its lowest level since December 4. The Aussie last changed hands at US $1.0417, down 0.6 percent. The New Zealand dollar dropped 1.2 percent to US $0.8147.

Copyright Reuters, 2012