USD Rebounds Further, But No Breakout Yet

The greenback was comfortably the best performer in G10 Tuesday, helping the USD index to recover further off the early December lows at 89.730. There was little sign of a recovery in risk appetite, with US equities sold off the overnight highs to trade lower in cash markets.

GBP had another bumpy session, with the ebb and flow of Brexit headlines still responsible for GBP volatility. GBP/USD initially at and around the Monday highs, but began to sell-off as the EU confirmed it had rejected the latest UK proposals on fisheries, leaving the clock still ticking before any pre-Christmas deal can be struck.

USD, JPY were the strongest in G10, SEK, NOK and NZD traded poorly.

Focus turns to Canadian GDP, US durable goods orders, personal income/spending and the early release of weekly jobless claims on Wednesday. There remain no central bank speakers of note.