• The dollar held above a recent three-year low against a basket of major currencies on Tuesday, with traders turning their attention to U.S. President Donald Trump’s State of the Union speech and a Federal Reserve policy meeting for catalysts.
The dollar rose 0.1 percent against a basket of six major currencies to 89.430, having pulled up from a low of around 88.43 set last week, its weakest level since December 2014.
Analysts said a renewed rise in U.S. bond yields this week lent some support to the dollar. The U.S. 10-year Treasury yield reached a peak of2.733 percent in Asian trading on Tuesday, the highest since April 2014, and last stood at 2.712 percent.
The euro eased 0.1 percent to $1.2373, edging away from a three-year high of $1.2538 touched last week.
Against the yen, the dollar eased 0.2 percent to 108.78 yen, edging back in the direction of a 4-1/2 month low of 108.28 yen set on Friday.
• U.S. economic growth unexpectedly slowed in the fourth quarter as the strongest pace of consumer spending in three years resulted in a surge in imports.
Gross domestic product expanded at a 2.6 percent annual rate also restrained by a modest pace of inventory accumulation, the Commerce Department said in its advance fourth-quarter GDP report on Friday. That followed a 3.2 percent growth pace in the third quarter.
Imports, which subtract from GDP growth, increased at their fastest rate in more than seven years. Rising imports underscore the challenges that the Trump administration faces in its quest to boost annual GDP growth to 3 percent.
• Tension escalated between North Korea and the United States after President Donald Trump warned the rogue state is facing "fire and fury" and North Korea state media responded by saying the country is considering a missile strike against the U.S. Pacific territory of Guam.
Global and national stock markets, however, remain largely unperturbed.
"The whole idea of a nuclear attack seems so far-fetched or idiotic … that most [investors] are giving this a very low probability," Jim Paulsen, chief investment strategist at the Leuthold Group, told CNBC.
Paulsen says the current market moves are limited to "traders reacting to headlines," calling the situation an "extreme bluster from two leaders who have an abundance of bluster."
• The Trump administration said on Monday it would not immediately impose additional sanctions on Russia, despite a new law designed to punish Moscow’s alleged meddling in the 2016 U.S. election, insisting the measure was already hitting Russian companies.
• The next Bank of Japan governor should maintain the central bank’s ultra-accommodative stimulus, a key part of the “Abenomics” policy mix, an economic adviser to Prime Minister Shinzo Abe said.
Koichi Hamada, an emeritus professor of economics at Yale University, praised Governor Haruhiko Kuroda, who is widely expected to be asked to stay on after his five-year term ends in April, but said there were other well-qualified individuals who could take up the reins.
• Oil prices fell on Tuesday for a second day as rising U.S. output and a strengthening dollar sapped demand for crude, pushing Brent below$69 a barrel for the first time in six days.
Brent crude futures, the global benchmark, had declined 46 cents, or 0.7 percent, to $69 a barrel by 0750 GMT, after earlier dropping to as low as$68.86. The contract for March delivery settled down $1.06, or 1.5 percent, at $69.46 a barrel on Monday.
U.S. West Texas Intermediate crude futures dropped 66 cents, or 1 percent, to $64.90 a barrel. On Monday, they fell 58 cents, or 0.9 percent, to $65.56
Reference: Reuters, CNBC
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