The greenback was weaker against the majors, falling to 1.3975 against the euro and relinquishing the 1.06-handle versus the Canadian dollar to 1.0565. US stocks climbed higher with the Dow Jones up by over 1.1% and the Nasdaq advancing by more than 1.2%. Crude oil rebounded sharply, rallying by 3.4% to just shy of the $77 per barrel level and spot gold gaining by more than 1% to $1,117.53 per ounce.

Economic reports released earlier today saw pending home sales recover from November's record plunge, increasing by 1.0% on a monthly basis in December versus a downwardly revised -16.4% a month earlier.

The calendar for Wednesday will see ADP private sector payrolls and the January non-manufacturing ISM survey. The ADP employment change report is estimated to post a loss of 30k jobs compared with 84k jobs shed in December. The January non-manufacturing ISM is estimated to improve to 51.0 from 50.1 in December.

AUD Slides on RBA Decision

The Australian dollar tumbled in the Tuesday session against the greenback, falling to 0.8781. Triggering the Aussie sell-off was the Reserve Bank of Australia's monetary policy announcement - in which markets were largely anticipating a 25-bp rate increase to 4.0%. The RBA caught the markets off-guard, leaving interest rates unchanged at 3.75%. In the accompanying statement, RBA Governor Stevens said economic conditions in Australia have been stronger than anticipated while inflation is expected to be consistent with the target in 2010. The Bank decided to hold policy steady for the time being since information about the early impact of rate changes remains limited.

AUDUSD has edged back above the 0.88-level in New York trading, benefiting from gains in commodities. The pair will encounter resistance at 0.8870, followed by 0.89 and 0.8940. Subsequent ceilings are eyed at 0.8960, backed by 0.90 and 0.9030. On the downside, support begins at 0.88, followed by 0.8780 and 0.8740. Additional floors will emerge at 0.87, backed by 0.8660 and 0.8620.