Asian session: The dollar weakened against most of its major peers

00:01 United Kingdom Gfk Consumer Confidence January -33 -31 -29

00:30 Australia National Australia Bank's Business Confidence December 2 3

00:30 Australia Private Sector Credit, m/m December +0.3% +0.4% +0.3%

00:30 Australia Private Sector Credit, y/y December +3.5% +3.6% +3.5%

05:00 Japan Housing Starts, y/y December -0.3% -1.4% -7.3%

The dollar weakened against most of its major peers after Greek Prime Minister Lucas Papademos said progress had been made in debt-swap talks with bondholders, sapping demand for a refuge from Europe’s fiscal crisis. Papademos said today he’s “strongly committed” to reaching a debt-swap agreement with Greece’s creditors. Representatives of the European Commission, the European Central Bank and the International Monetary Fund want more fiscal tightening and wage cuts from Greece, the Greek prime minister told reporters after a European Union summit in Brussels.

The Australian and New Zealand dollars gained as Asian stocks rallied, boosting the allure of higher-yielding currencies. A confidence index in Australia was at 3 last month from 2 in November, according to a National Australia Bank Ltd. survey of about 400 companies from Jan. 9-13 that was released in Sydney today. That was the highest since May. Traders see a 60 percent chance that the RBA will lower borrowing costs by 25 basis points when policy makers gather next week, cash rate futures show. Australia’s benchmark rate is currently at 4.25 percent after back-to-back reductions at the central bank’s last two meetings.

The yen climbed to a three-month high against the greenback, spurring speculation that Japan’s government may take action to curb the currency’s advance.

EUR/USD: during the Asian session the pair gain up to $1.3200.

GBP/USD: during the Asian session the pair gain showed new week’s high.

USD/JPY: during the Asian session the pair continued decrease.

European data for Tuesday starts at 0700GMT with the German ILO measure of employment along with December and 2011 retail sales data. France data at 0745GMT includes consumer spending, PPI and also housing starts/permits data for December. The main German unemployment data is due at 0855GMT and is expected to see a jobless change of -10k, leaving the unemployment rate unchanged at 6.8%. EMU unemployment data is also due, at 1000GMT. The weekly US ICSC Mall Sales is due at 1145GMT, followed at 1330GMT by the Employment Cost Index. This is followed at 1355GMT by the weekly Redbook Chain Story sales, at 1400GMT by the S&P/Case-Shiller Home Price Index and then at 1445GMT by the Chicago PMI. At 1500GMT, consumer confidence is expected to rise to a reading of 68.0 in January after the solid jump in December to the strongest reading since April.