Heightened risk-aversion remains the dominant theme in the global financial market as US equity bourses followed the Asian and European indexes lower in Tuesday trading. The greenback climbed sharply higher against the Aussie, Loonie and euro while trading lower versus the Japanese yen. Crude oil suffered steep losses overnight but regained its footing in the New York session, to trade lower by 2.6% around $68.40.

The economic reports released earlier in the session, for the most part, were better than forecast. The March S&P/Case-Shiller home price index declined by 0.05% compared with a downwardly revised -.0.14% from a month earlier, while the annualized home price index edged up by 2.3% versus 0.7% in the previous year. The May Richmond Fed manufacturing index was largely in line with consensus estimates, printing at 26 compared with a 30 reading in the previous month. The home price index posted a small monthly gain in March, up by 0.3% while dipping on a quarterly basis at -1.9%. Rounding out today's reports was a sharp increase in the Conference Board's consumer confidence survey, which spiked to its highest level since April 2008 at 63.3 in May, besting calls for an increase to 58.5 from a downwardly revised April reading of 57.7.

The calendar for Wednesday will see US April durable goods orders and new home sales. New home sales are forecast to increase by 3.4% in April, albeit at a much slower pace than the 26.9% reading in March, increasing to 425k units from 411k units. Meanwhile, durable goods orders in April are estimated to increase by 1.4% reversing the 1.3% decline from March while the excluding transportation durable goods orders are forecast to edge up by 0.5% versus 2.8% previously.

Amid heightened risk-aversion as a result of geopolitical tension in the Korean peninsula and persistent worries over the Eurozone debt crisis, the greenback will continue to reap the rewards as a safe-haven currency while yields on government Treasuries slide further. The euro managed to claw back from earlier losses, which saw the single currency break below the 1.22-level to trade around 1.2178. EURUSD holds steady around 1.2280 with interim resistance seen at 1.23, followed by 1.2340 and 1.2370. Subsequent resistance is eyed at 1.24 backed by 1.2450 and 1.25. On the downside, support starts at 1.2250, followed by 1.2230 and 1.22. Subsequent floors are eyed at 1.2160, backed by 1.2130 and 1.21.