Dollar remains on the back foot due to continued risk sentiment

The greenback fell across the board on Tuesday on continued risk sentiment on optimism that U.S. lawmakers would increase stimulus payments to individuals and US stocks rose to intra-day record highs but later pared gain in New York afternoon as U.S. stocks retreated.  
  
Reuters reported the Democratic-led U.S. House of Representatives voted 275-134 to meet President Donald Trump's demand for $2,000 COVID-19 relief checks on Monday, sending the measure on to an uncertain future in the Republican-controlled Senate.  
  
Versus the Japanese yen, dollar traded inside a narrow range as focus remained on other majors. Price met renewed selling at 103.83 in Australia and retreated to 103.61 in early European morning and then fell to 103.47 in New York on usd's broad-based weakness.  
  
The single currency traded with a firm bias in Asia and gained to 1.2242. The pair then rose to 1.2257 in early European morning, then to a fresh 2-1/2 year peak at 1.2275 (Reuters) in New York morning on usd's weakness due to continued risk sentiment before retreating to 1.2237 on profit-taking.  
  
The British pound also traded with a firm undertone in Asia and gained to 1.3494 and then rose to session highs at 1.3523 in early European morning on usd's weakness. However, the pair pared its gains and retreated sharply to 1.3469 on cross-selling of sterling especially vs euro before staging a rebound to 1.3421 in New York. Price last traded at 1.3500 near the close.  
  
In other news, Reuters reported European Union Brexit negotiator Michel Barnier said on Tuesday the trade deal struck with Britain was a relief and provided stability for people and companies.    "We've delivered an orderly Brexit," Barnier told Franceinfo radio. The last-gasp deal clinched a week before the year-end deadline brought "a little stability," he added.    Barnier said there were still some elements to define in the EU's future relationship with Britain, including on foreign policy cooperation.  
  
Data to be released on Wednesday:  
  
Germany retail sales, UK nationwide house price, Swiss KOF indicator, investor sentiment, and U.S. trade balance, wholesale inventories, Chicago PMI, pending home sales.