Previous session overview

The euro climbed to its highest level in nearly two weeks in New York trading, underpinned by higher global stocks prices, but the single currency's rally lost some momentum after economic data showed the U.S. recovery is getting traction.

The dollar is lower against most rivals Tuesday morning as investors book profits on the greenback's December rally ahead of the year-end.

The ICE Dollar Index, which tracks the dollar against a trade-weighted basket of currencies, was at 77.470 from 77.625.

Amid very light trading, which is typical for the days between the Christmas and New Year's holiday breaks, currency markets are also taking their cues from stocks.

U.S. consumers in December turned more optimistic as expectations rose to a two-year high, according to the Conference Board's report released Tuesday.

The U.S. currency has rallied in December since the much-stronger non-farm payroll number for November spurred bets that the Federal Reserve will begin removing monetary stimulus sooner rather than later.

For most of 2009, near-zero interest rates in the U.S. prompted investors to sell cheap dollars to fund purchases of higher-yielding currencies and other riskier assets.

Market expectation

The U.S. economy seems to be getting better, which generally leads to one place: higher rates, said analysts. Better U.S. news, including the consumer sentiment index, should provide a bit of a check to the dollar's fall.

Trading volumes in currency markets remain thin as investors are returning after markets in the U.K., Canada and some other countries were closed Monday.

Euro stalls ahead of demand protecting a USD1.4400 option expiry and then nudges higher. Market players are reluctant to push the euro lower with US yields edging down from their earlier highs. Offers expected near overnight highs near USD1.4460 and again at USD1.4480/85.

Disclaimer: the data made available by Dukascopy (Suisse) SAis for informational purposes only. Publication of this data by Dukascopy (Suisse) SA does not constitute provision of investment advice and Dukascopy (Suisse) SA assumes no responsibility with regard toany information, forecast or recommendation herein contained and assumes no responsibility with regard toany losses resulting from any activities conducted the basis of this data, including any investment decisions.

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