The greenback surrendered its initial gains made in Europe on Monday and retreated in New York in tandem with U.S. Treasury yields to end the day little changed on uncertainty over the Federal Reserve's tapering timeline.  
  
Versus the Japanese yen, dollar traded with a firm bias in New Zealand and gained to session highs at 110.15 in early European morning. However, the pair then pared its gains and retreated in tandem with U.S. yields to 109.91 in New York morning before rebounding to 110.03.   
  
The single currency remained under pressure in New Zealand and dropped to 1.1776 in early European morning. Despite a brief rebound to 1.1792, the pair fell to a 2-week trough at 1.1771 ahead of New York open on cross-selling of euro especially vs sterling. Euro then erased its losses and rallied to an intra-day high at 1.1817 in New York on usd's broad-based weakness.  
  
The British pound traded sideways in New Zealand and briefly rebounded to 1.3846 in Asian morning, however, the pair found renewed selling there and dropped to session lows at 1.3797 in early European morning. Cable then erased its losses and rose to an intra-day high at 1.3852 in New York on broad-based retreat in usd before stabilising.  
  
In other news, Reuters reported European Central Bank policymaker Isabel Schnabel said on Monday that inflation in the euro area will "in all likelihood" ease next year after the current spike but she listed risks to that scenario from supply bottlenecks to higher wages.    "Today, against the background of rising inflation rates, particularly in Germany, it was a matter of concern to me to alleviate people's concern that inflation may remain persistently too high or even shoot up uncontrollably," Schnabel told an audience of German entrepreneurs.     "In all likelihood, inflation will noticeably decrease as soon as next year."  
  
Data to be released on Tuesday:  
  
New Zealand Westpac consumer survey, Australia NAB business conditions, NAB business confidence, house price index, Japan industrial output, capacity utilization, U.K. claimant count, ILO unemployment rate, employment change, average weekly earnings, Swiss producer/import price, Canada leading index, manufacturing sales, U.S. CPI and redbook retail sales.  

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