The greenback was higher against the majors, edging up to just shy of the 90-level versus the yen and a 2 ½ month high against the euro. The US economic reports released this morning saw producer prices climb higher than anticipated with the headline figure up 1.8% in November from 0.3% in the previous month while the annualized figure reversed the previous year's 1.9% decline, instead increasing by 2.4%. Core PPI climbed by 0.5%, larger than estimates for a 0.2% increase from a 0.6% decline a month earlier. The NY Fed manufacturing survey sharply missed estimates for an improvement to 24 in December from 23.51 in November, instead increasing by only 2.55. Industrial output for November improved to 0.8% from 0.1% while capacity utilization edged up to 71.3% from 70.7% a month earlier. Meanwhile, the NAHB housing market index missed calls for an increase to 18 from 17 in November, slipping to 16.

Traders will shift focus to the FOMC monetary policy decision, due out tomorrow at 2:15 PM. A barrage of economic reports will also be released, consisting of November CPI, building permits, real earnings, housing starts and the Q3 current account balance.

Euro Dips to 2 ½- month low

The euro extended losses against the dollar in the Tuesday session, sliding to a fresh 2 ½-month low just above the 1.45-figure following its breach of the key 100-day moving average around the 1.4650-mark. The break paves the way for a test lower in the euro to the 1.44-level in the near term.

Germany's ZEW sentiment survey for December was weaker, albeit in line with consensus estimates. The economic sentiment declined to 50.4 in December, slightly better than calls for a decline to 50.0 from 51.1 in November. The current situation index improved to -60.6 compared with -65.6 a month earlier.

In the coming session, economic reports from the Eurozone include Germany's manufacturing PMI, Eurozone PMI and inflation reports. Germany's flash manufacturing PMI for December is expected to improve marginally to 52.5 from 52.4 in November, while the services PMI is seen holding steady at 51.4. The Eurozone December manufacturing PMI is seen improving marginally to 51.4 from 51.2 and the services PMI is expected to remain unchanged at 53.0.

EURUSD will encounter support at 1.45, followed by 1.4460 and 1.4430. Subsequent floors are eyed at 1.44, backed by 1.4370 and 1.4340. On the upside, resistance starts at 1.4550, followed by 1.4575 and 1.46. Additional ceilings will emerge at 1.4630, followed 1.4660 and 1.47.