· The dollar rose to a two-week peak against a basket of currencies on Tuesday as unexpectedly strong data on U.S. services industries and new home sales allayed some worries about the state of the world's largest economy.
The euro weakened to two-week lows versus the greenback on expectations that the European Central Bank meeting on Thursday would hint at a delay in raising rates until next year and soon relaunch long-term bank loans to battle an economic slowdown.
Earlier on Tuesday, the U.S. Commerce Department said new single-family home sales increased to a seven-month high in December, while the Institute for Supply Management said its gauge on services sector activity rose more than expected last month.
An index that tracks the dollar against the euro, yen, sterling and three other major currencies increased 0.16 percent to 96.83 in late U.S. trading. It earlier touched a two-week high of 97.008.
The euro fell to a two-week trough of $1.12895. It was last down 0.26 percent to $1.1308.
· "The ECB's new projections on Thursday might paint a more subdued picture than before," said Commerzbank FX analyst Antje Praefcke, adding the euro appeared to be "aiming for the $1.13 mark."
· President Donald Trump's decision to end India's preferential trade status comes at a politically sensitive moment for the emerging market nation which is struggling with two domestic challenges.
First, is the upcoming election where it is unclear whether Prime Minister Narendra Modi will remain the leader of the world's largest democracy. Modi's Bharatiya Janata Party is fending off challenges from the opposition party known as Congress as well as rising regional parties.
If tensions rise, experts believe India could respond by implementing retaliatory tariffs. Pravin Krishna, professor of international economics and business at Johns Hopkins University, says that would ultimately hurt the American consumer.
But there are other ways India has made life a bit tougher for U.S. companies.
· Talks between European Union and British Brexit negotiators ended after more than three hours in Brussels on Tuesday and will resume on Wednesday, sources from both sides said.
An EU official said the talks did not go well.
Neither side released any comments after the meeting, which involved the EU’s Brexit negotiator Michel Barnier and the UK’s Brexit Secretary Stephen Barclay and Attorney General Geoffrey Cox.
· Oil prices traded roughly flat on Tuesday as OPEC-led efforts to tighten supply offset the restart of Libya's biggest oilfield and the prospect of weaker demand.
Investor hopes for an imminent trade deal between the United States and China also wavered on mixed comments from the White House.
U.S. West Texas Intermediate crude settled Tuesday's session 3 cents lower at $56.56. Brent crude, the international benchmark, rose 19 cents to $65.86 a barrel.
Reference: CNBC, Reuters
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