The British pound tumbled from 1.4441 to a multi-year low of 1.3862 on Tuesday on active cross-selling in sterling after the Royal Bank of Scotland on Monday announced the biggest losses in UK corporate history.

The single currency weakened versus the dollar from 1.3104 to 1.2893 on escalating concerns that more euro-zone nations may face credit ratings downgrades overshadowing the release of better-than-expected German ZEW economic sentiment survey. German economic sentiment index improved to -31.0 in December from -45.2, and compared to expectations of -44.0.

U.S. currency rose broadly against European currencies except the Japanese yen on general optimism that the U.S. economy will improve under the Obama Administration, however, the greenback briefly pared gains versus major currencies as stocks extended losses after President Barack Obama failed to provide new details on measures to address the economic crisis in his inauguration speech.

New Zealand dollar and Australian dollar weakened against U.S. currency from 0.5382 to 0.5240 and from 0.6685 to 0.6542 respectively. The Bank of Canada cut rates 50 basis points to a 50-year low of 1.00%. The U.S. currency rallied against the Canadian dollar to 1.2699.

Wednesday will see the release of Japan’s leading indicators, German PPI, U.K. claimant count, ILO employment, PSNCR and U.S. NAHB housing market index. Investors also focusing on the Bank of England vote outcome.