Dollar gains as euro and sterling continues to fall

The greenback extended its recent ascent and ended higher against majority of its peers on Tuesday due to continued weakness in euro and sterling. The single currency fell on concern that extended lockdowns in the euro zone will dampen economic growth in the region.   
  
Versus the Japanese yen, dollar rebounded from 104.84 to 105.02 in Asia on cross-selling in jpy before retreating to 104.86 in European morning. However, the pair then gained to an 11-week high of 105.17 in New York due to usd's strength as well as rise in U.S. Treasury yields and then weakened again to 104.97 on profit-taking.  
  
Although the single currency recovered to 1.2087 in Asian morning, price retreated to 1.2065 at European open before rebounding again to 1.2087. However, the pair then fell to a 2-month low of 1.2011 in New York on concerns over extended lockdowns in the euro zone together with usd's broad-based strength and then bounced to 1.2045 on short-covering.    Reuters reported the European Union's statistics office Eurostat said that according to its preliminary flash estimate, gross domestic product in the 19 countries sharing the euro fell by 0.7% quarter-on-quarter, for a 5.1% year-on-year decline.     Economists polled by Reuters had expected a 1.0% quarterly fall and a 5.4% annual contraction after a sharp rebound in the July-September period when the euro zone eased restrictions on travel and leisure after a first wave of COVID-19 cases.   
  
The British pound went through a hectic session. Although cable gained from 1.3660 in Australia to 1.3698 in Asia, the pair retreated to 1.3672 at European open before rising to session highs of 1.3710 on cross-buying in sterling, especially versus euro. However, price erased intra-day gains and fell to 1.3611 in New York on usd's strength as well as renewed post-Brexit concerns and then recovered to 1.3668.  
  
Reuters reported trust between Britain and the European Union was eroded by the bloc's moves to place export restrictions on vaccines to Northern Ireland last week, senior minister Michael Gove said on Tuesday.    Reuters reported senior British minister Michael Gove said on Tuesday the European Union had triggered Article 16 of the Northern Irish protocol, which covers post-Brexit trade between Britain and Northern Ireland, outside of the rulebook.     The article allows either party to take unilateral measures if there is an unexpected negative effect arising from the Brexit divorce agreement.   
  
Data to be released on Wednesday :  
  
Australia AIG construction index, building permits, New Zealand unemployment rate, employment change, labour cost index, Japan Jibun Bank services PMI, China Caixin services PMI, Italy Markit services PMI, CPI, CPI (EU norm), France Markit services PMI, Germany Markit services PMI, EU Markit services PMI, HICP, core HICP, producer price index, UK Markit services PMI, and U.S. MBA mortgage applications, labor costs, productivity, ADP employment change, Markit services PMI, ISM non-manufacturing PMI.