Forex: Tuesday’s review

Yesterday the dollar declined  as US stocks advanced, damping demand for safer investments.

The euro’s gains were tempered before Spain and Italy sell debt this week amid concern the nations will struggle to meet funding needs. Spain will auction as much as 5 billion euros of bonds due in 2015 and 2016 on Jan. 12, and Italy will sell 12 billion euros of bills the same day.

The dollar and yen weakened against higher-yielding currencies before Germany’s chancellor meets with the International Monetary Fund’s managing director amid signs European leaders are taking steps to end the debt crisis.

EUR/USD: yesterday the pair has slightly grown.

GBP/USD: yesterday the pair has slightly grown.

USD/JPY: yesterday the pair traded in range Y76.77-Y76.90.

European events for Wednesday start at 0700GMT with German GDP for 2011, while UK data at 0930GMT sees trade data as well as BoE quoted rates data. US data starts at 1200GMT with the weekly MBA Mortgage Applications Index. At 1340GMT, Chicago Fed President Charles Evans speaks to the Rotary Club of Lake Forest and Lake Bluff, while at 1400GMT, Atlanta Fed President Dennis Lockhart

delivers a speech on the economic outlook to the Georgia Center for Nonprofits in Atlanta. European events continue at 1500GMT, when the Eurozone Insee, IFO, ISAE institutes give their Q1 economic outlook.