The greenback slumped across the board, relinquishing the 1.48-level against the sterling and sliding to 1.0264 versus the Loonie. The US equity bourses rallied on Tuesday trading, with the Dow Jones edging higher by almost 1.5% and the Nasdaq advancing by more than 2%. Crude oil edged up by over 2%, buoyed past the $76-per barrel mark hovering near $76.62.

The US economic releases this morning were predominantly weaker than anticipated. The June Empire manufacturing index missed estimates for an improvement to 20.0, instead edging up slightly to 19.57 from 19.11 in May. The April net long-term TIC flows printed at $83.0 billion, compared with $140.5 billion a month prior. The key highlight today was the NAHB housing marking index for June, which fell by more than expected to a reading of 17 and sharply lower than the May report of 22. With the expiration of the government tax credit at the end of April, recent reports on the housing market have reflected a sharp pullback in activity - boding poorly for US economic growth over the coming quarters.

The session ahead will feature additional key releases including May housing starts, building permits, May producer prices, the MBA mortgage applications, industrial production and capacity utilization. Consensus estimates for housing starts in May are seen lower by 3.7% to 648k units compared with 672k a month earlier.

Cable Edges Higher on UK Data

The British pound climbed to its highest level in a little over a month above the 1.48-mark to 1.4836 against the US dollar on a combination of improving global risk-appetite as well as speculation that the UK government will implement emergency budget cuts to bring down the deficit. The Chancellor of the Exchequer Osborne will present the emergency budget next week on June 22nd.

The UK data released overnight also benefited the sterling, with the April UK home price index rising to its highest level since 2007 at 10.1% on an annualized basis versus 9.7% a year earlier. Meanwhile, softer than forecast inflation data tempered worries that the BoE would need to tighten monetary policy to rein-in consumer prices back to the Bank's inflation target. The headline CPI figures printed at 0.2% for May, compared with 0.6% a month earlier and slightly softer at 3.4% versus 3.7% a year earlier. The core CPI data came off somewhat at 2.9%, down from 3.1% in the previous year.