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• Sterling's rebound came to an abrupt halt on Tuesday after a report that colleagues of Prime Minister Theresa May believed they had sufficient numbers to mount a no-confidence vote in her leadership.

The British pound fell to a new 20-month low of $1.2490, down more than half a percent on the day, after earlier trading above $1.26. A stronger dollar also weighed on the British currency

• May on Tuesday met with European leaders, seeking support for changes to her Brexit deal in a last-ditch bid to save it.

The European Union has ruled out renegotiating the divorce treaty. May's spokeswoman said the British parliament would vote on a deal before Jan. 21. If there was no satisfactory deal by then, parliament would be given a debate on the issue.

• The dollar hit a one-month peak against a basket of currencies on Tuesday, as China and the United States discussed plans for talks to avert a trade war between the world’s two biggest economies.

An index that tracks the greenback against six major peers .DXY was up 0.18 percent at 97.396. Earlier Tuesday, it touched 97.545, which was the highest since Nov. 28.

The dollar hit a one-month peak against a basket of currencies on Tuesday, as China and the United States discussed plans for talks to avert a trade war between the world’s two biggest economies.

• White House officials and China’s commerce ministry said Chinese Vice Premier Liu He, U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer spoke on a telephone call on Tuesday, but offered no details what they discussed.

Still the call was seen as a step to ratchet down trade tension between Beijing and Washington, soothing worries about an all-out trade war between the two nations that would hurt global economic growth, analysts said.

• The single currency was also bogged down by concerns over protests in France against inequality and President Emmanuel Macron’s economic reforms.

Investors were also focused on the European Central Bank’s economic assessment of the euro zone, due on Thursday.

Fitch Ratings’ chief economist Brian Coulton said the ECB as expected would signal the end of its asset purchases, but will unlikely hint at a rate hike anytime soon given the recent batch of softer-than-expected economic data across the euro zone.

The euro was 0.26 percent lower at $1.1325.

• Enough letters have been submitted by Conservative lawmakers to trigger a vote of no confidence in British Prime Minister Theresa May’s leadership, the BBC reported on Tuesday, citing multiple sources who believe the tally of 48 has been reached.

British Prime Minister Theresa May’s lawmakers could vote on a no confidence motion in her leadership as soon as Wednesday night, said a Conservative lawmaker who has long been critical of May.

• British officials are warning European Union member states that a no-deal Brexit creates a high risk of financial disruption to banks, Sky News reported on Tuesday, citing unnamed sources.

• The U.S. Treasury and U.S. Trade Representative’s office said on Tuesday they intended to sign a new bilateral insurance agreement with Britain that will provide insurance market regulatory certainty and continuity after Britain leaves the European Union.

• U.S. producer prices unexpectedly rose in November as increases in the costs for services offset a sharp decline for energy products, but the overall momentum in wholesale inflation appears to be slowing.

The Labor Department said on Tuesday its producer price index for final demand edged up 0.1 percent last month after jumping 0.6 percent in October.

In the 12 months through November, the PPI rose 2.5 percent, slowing from October's 2.9 percent surge. Economists polled by Reuters had forecast the PPI to be unchanged in November and rise 2.5 percent on a year-on-year basis.

• The US President Donald Trump is out on the wires stating that it would be foolish for the Fed to hike interest rates next week. Trump added that he is "fighting some trade battles" and needs the central bank to stay accommodative.

The US central bank is widely expected to raise rates by 25 basis points next week and adopt a wait-and-see approach in 2019.

• Bloomberg News reported earlier on Tuesday that China is moving toward cutting tariffs on cars made in the U.S. to 15 percent from the current 40percent. The proposal has been submitted to the Chinese Cabinet and will be reviewed in the coming days, the report said. A U.S. official later told Reuters that China indicated it will cut the tariffs, but the U.S. would wait on formal documentation and timing.

Trump also tweeted the administration was having "very productive conversations going on with China," adding: "Watch for some important announcements."

• Oil prices rose on Tuesday, recovering some of the previous session's losses with the help of a slightly weaker dollar and an outage hurting Libyan production.

Global stocks have fallen by more than 5 percent so far this month on worries about the impact of a U.S. trade dispute with China on economic growth. Any slowdown would hurt oil demand.

Brent crude oil futures ended Tuesday's session 23 cents higher at $60.20 a barrel, off a session high of $61.10. U.S. crude futures rose 65 cents, or 1.3percent, to $51.65 a barrel, after earlier rising more than 2 percent to $52.43.

• A further boost came from a shutdown in production in Libya, where the National Oil Company (NOC) declared force majeure on Monday on exports from the El Sharara oilfield, the country's biggest, which was seized last weekend by a militia group.

NOC said the shutdown would result in a production loss of 315,000 barrels per day, and an additional loss of 73,000 bpd at the El Feel oilfield.

To shore up oil prices which have tumbled by 30 percent since a peak above $86 in October, OPEC, Russia and their allies agreed last week to cut output by a joint 1.2 million bpd from January.

• Russia said on Tuesday it plans to cut its oil output by 50,000 to 60,000 bpd in January, as part of a gradual means of meeting its commitment under the deal to cut by 220,000 bpd.

Reference: CNBC, Reuters, Bloomberg