RTTNews - The dollar turned lower versus the euro Tuesday morning in New York as global leaders prepared to gather in Italy for the G8 Summit.

There are no major releases from the US scheduled for release on Tuesday, and traders may also pause ahead of Wednesday's kick off of earnings season. Corporate results may go a long way in determining whether the economy is on the mend.

The dollar dropped to 1.4027 versus the euro, extending its move away from yesterday's 2-week high of 1.3876. Traders reacted to news that German factory orders grew more than expected in May.

The Federal Ministry of Economics and Technology said German factory orders recorded a monthly growth of 4.4% in May, much larger than the expected increase of 0.5% and April's 0.1% rise.

Year-on-year, orders plummeted 29.4% in May, slower than the 37.1% decline seen in April. Domestic orders were down 25%, while foreign orders plunged 33%.

The dollar was on hold versus the sterling Tuesday morning, staying near 1.6200. Yesterday, the dollar hit a monthly high near 1.6100 before leveling off.

U.K. industrial production unexpectedly dropped 0.6% in May from April, a report from the Office for National Statistics showed Tuesday. At the same time, manufacturing output decreased 0.5% compared to previous month. Economists were looking for a monthly growth of 0.2% each for industrial as well as manufacturing output.

The dollar also paused versus the yen, stabilizing near 95.30. On Monday, the buck hit a weekly low of 94.60.

Tuesday, a report by Japan's Ministry of Finance said the official reserve assets totaled US$1.019 trillion at the end of June, representing a decline of US$4.84 billion from May.

Wednesday will be a busy day for currency traders. The Mortgage Bankers' Association's purchase applications index, which measures applications at mortgage lenders is due to be released at 7 AM ET on Wednesday.

The Energy Information Administration is scheduled to release its weekly petroleum inventory report for the week ended May 1st at 10:30 AM ET on the same day.

G8 leaders will meet in Italy, and while discussion of a new global reserve currency is apparently off the table, markets will be watching for statements on the world economy and tensions in the Middle East.

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