During early deals on Tuesday, the US dollar climbed to a 3-week high against the euro and a 20-day high against the Swiss franc. The dollar also showed strength against the pound, but dropped against the yen due to across the board rallying of the latter.
The dollar has been rallying against its major European counterparts on news that Obama's economic team is working on a new Stimulus package including tax-cuts by approximately $300 billion. The cuts would represent about 40 percent of the two-year stimulus package now estimated to reach $775 billion. Barack Obama and congressional democrats has been moving with this offer in order to gain support from Republican representatives, and to provide some relieve to companies which hopefully translates into job creation.
The US dollar strengthened to a 20-day high against its Swiss counterpart during Tuesday's early trading. At about 12:20 am ET, the pair reached 1.1170, up from Monday's closing value of 1.1093. On the upside, the dollar may likely target the 1.159 level against the alpine currency.
The US currency that closed Monday's New York deals at 1.3636 against the euro, climbed to 1.3504 by about 12:20 am ET Tuesday. This set a 3-week high for the dollar. If the dollar rises further, it may likely target the 1.325 level against the single currency.
The dollar that climbed to a new multi-year high of 1.2336 against its European counterpart in late October, lost ground and fell to a new multi-month low of 1.4721 on December 18. Thereafter, the euro-dollar pair strengthened again and it has gained 8% thus far.
The euro has been weakening on expectation of a rate cut when the European central bank members meet on next week.
Against its British counterpart, the US dollar drifted higher during Tuesday's early trading. At about 12:20 am ET, the buck reached 1.4572 against the pound, compared to yesterday's closing value of 1.4704. The next upside target level for the dollar is seen around the 1.443 level.
The pound slipped today as the consumer sentiment in Great Britain moved to the lowest point on record in December. The Nationwide Building Society reported that its consumer confidence index for the U.K. declined 4.0 points last month, to a reading of 47.0, the lowest in the four-year history of the survey.
The dollar fell against its Japanese counterpart during today's early deals due to across the board strengthening of the latter. The dollar that was worth 93.39 against the yen at Monday's close, dropped to 92.86 by about 11:15 pm ET.
Japan's monetary base was up 1.8 percent on year in December, the Bank of Japan said today, standing at 92.435 trillion yen. That follows a 1.9 percent annual increase in November to 88.85 trillion yen.
French consumer confidence, euro-zone December CPI, PMI reports from France, Germany, Euro-zone and Britain are the major economic releases scheduled for the upcoming session.
The US pending home sales, ISM non-manufacturing composite index and the factory orders report are slated for release in the New York session today.
At 2:00 pm ET, minutes of the FOMC's December 16th meeting will be made public. While announcing an interest rate cut in the range of 0%-0.25% at its December meeting, the FOMC noted that the outlook for economic activity has weakened further, with a deterioration in labor market conditions, a decline in consumer spending, business investment and industrial production and tighter credit market conditions. The Committee acknowledged the diminishing of inflationary pressures and also expressed its view that inflation will moderate further in coming quarters in light of the slowing economic growth.
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