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• The dollar fell to its lowest in over three months against a basket of major currencies on Friday, marking its steepest annual drop since 2003, on doubts over durability of a pickup in U.S. economic growth in wake of last week’s tax overhaul.

The dollar dropped on Tuesday to its lowest in more than three months, weighed down on the first trading day of 2018 by expectations of a slower pace of interest rate increases by the Federal Reserve amid a tepid U.S. inflation picture.

• The euro hit a three-month peak at $1.2028 EUR=, bringing its annual gain to 14.2 percent. The euro rose to start the new year, climbing to a nearly four-month high of $1.2082. It was last up 0.3 percent at $1.2049.

• Euro zone manufacturers ended 2017 by ramping up activity at the fastest pace in more than two decades, a survey showed on Tuesday, and rising demand suggests they will start the new year on a high.

The euro’s rally was a drag on the greenback in 2017. The index that tracks the dollar versus the euro and five other major currencies .DXY fell as low as 92.080, which the lowest since Sept. 22. It recorded a 9.8 percent annual decline, the biggest yearly loss since 2003.

• The dollar index hit a 3-1/2-month trough of 91.751 and was last down 0.3 percent at 91.887 . For 2017, the dollar index slid more than 9.8 percent, its weakest since 2003.

• Against the yen, the dollar fell 0.4 percent to 112.32. The yen continues to benefit from last week’s release of the Bank of Japan’s minutes of its meeting.

The minutes showed some members are considering tightening monetary policy if the economy continues to improve next year, which would be a significant shift in strategy for a central bank thought to be the last to exit easier monetary policies.

• One of the most dramatic market developments in 2017 was the breath-taking rise of bitcoin BTC=BTSP and other cryptocurrencies. While they have pulled back at year-end, many of these digital currencies have surged in value this year.

Bitcoin was last up 1.18 percent at $14,564.76 on the Bitstamp exchange. It was off the record highs near $20,000 touched 12 days ago but still headed for a gain of roughly 1,400 percent in 2017.

• The head of a conservative Republican faction in the U.S. Congress, who voted this month for a huge expansion of the national debt to pay for tax cuts, called himself a “fiscal conservative” on Sunday and urged budget restraint in 2018.

When they return from the holidays on Wednesday, lawmakers will begin trying to pass a federal budget in a fight likely to be linked to other issues, such as immigration policy, even as the November congressional election campaigns approach in which Republicans will seek to keep control of Congress.

President Donald Trump and his Republicans want a big budget increase in military spending, while Democrats also want proportional increases for non-defense “discretionary” spending on programs that support education, scientific research, infrastructure, public health and environmental protection.

• U.S. Republican Senator Orrin Hatch said on Tuesday he will not seek re-election in November, opening the door to a potential Senate bid by Mitt Romney, the 2012 Republican presidential candidate and one of the party’s harshest critics of President Donald Trump.

• U.S. President Donald Trump said in tweets on Tuesday that the United States may withhold future aid payments to Palestinians, accusing them of being “no longer willing to talk peace” with Israel.

The President’s tweets follow plans disclosed by his U.N. ambassador earlier on Tuesday to stop funding a United Nations agency that provides humanitarian aid to Palestinian refugees.

• Relations between the Palestinians and Washington soured early last month after Trump recognized Jerusalem as Israel’s capital, generating outrage across the Arab world and concern among Washington’s Western allies.

• Kim Jong Un warned the United States on Monday he had a “nuclear button” on his desk ready for use if North Korea was threatened, but offered an olive branch to South Korea, saying he was “open to dialogue” with Seoul.

South Korea on Tuesday offered talks with North Korea amid a standoff over its weapons programs, a day after North Korean leader Kim Jong Un said he was open to negotiations but that his country would push ahead with “mass producing” nuclear warheads.

The U.S. State Department said on Tuesday it is up to South Korea whether to hold talks with North Korea but Washington is skeptical of North Korean leader Kim Jong Un’s sincerity if such talks happen.

• China’s central bank injected a net 212.36 billion yuan ($32.7 billion) into the financial system via short- and medium-term liquidity tools in December, rising sharply from November as it sought to ease tight cash conditions before the year-end.

In November, the People’s Bank of China only injected 4.74 billion yuan of funds into the financial system, amid a sustained crackdown on riskier lending to reduce financial risks.

• Growth in China’s manufacturing sector unexpectedly picked up to a four-month high in December as factories cranked up production to meet a surge in new orders, a private business survey showed on Tuesday.

The Caixin/Markit Manufacturing Purchasing Manager’s Index (PMI) rose to 51.5 last month, from 50.8 in November, and far outpacing economists’ expectations for a slight dip to 50.6.

• Euro zone factories ended 2017 growing at their fastest pace in more than two decades while performance in Asia was more uneven, with its third-largest economy India leading the field and manufacturing giant China unexpectedly resilient.

The December euro zone final manufacturing Purchasing Managers’ Index (PMI) was 60.6, matching an earlier preliminary reading, the highest since the survey began in June 1997. Any figure above 50 represents growth.

• German factories shifted into overdrive in December as strong foreign demand propelled growth in activity to a record high and capacity constraints led to the biggest delivery delays in more than 20 years, a survey showed on Tuesday.

IHS Markit’s Purchasing Managers’ Index (PMI) for manufacturing, which accounts for about a quarter of the economy, jumped to an all-time high of 63.3 from 62.5 in the previous month.

• U.S. oil prices closed above $60 a barrel on the final trading day of the year, the first time since mid-2015, as the commodity ended 2017 with a 12 percent gain spurred by strong demand and declining global inventories.

U.S. West Texas Intermediate (WTI) crude futures settled at $60.42, the highest close since June 2015. Brent crude futures were last up 45 cents at $66.62 a barrel at 1932 GMT. Brent broke through $67 this week for the first time since May 2015.

• Oil prices hit mid-2015 highs in early trading on Tuesday but dipped to settle slightly lower as major pipelines in Libya and the UK restarted and U.S production soared to the highest level in more than four decades.

U.S. West Texas Intermediate (WTI) crude futures CLc1 settled 5 cents lower at $60.37 a barrel. In early trading WTI hit $60.74, the highest level since June 2015.

Brent crude futures LCOc1, the international benchmark, settled 30 cents, or 0.5 percent lower at $66.57 a barrel. The session high of $67.29 was the highest since May 2015.

Reference: Reuters