During early deals on Tuesday, the US dollar showed weakness against its European counterparts. The dollar thus declined to a 4-day low against the British pound. On the other hand, the US currency climbed to a 4-day high against the Japanese yen.

Stocks on Wall Street saw continued weakness throughout the trading day on Monday, as investors responded to disappointing news regarding the auto industry as well as renewed concerns about the outlook for the financial sector. Some traders also looked to cash in on the gains seen in the three previous weeks. The major averages regained some ground going into the close of trading, but they remained firmly negative. The Dow Jones Industrial Average fell 3.27%, the Nasdaq Composite lost 2.81% and the S&P 500 index moved down 3.48%.

Much of the selling pressure came as President Obama and his auto task force indicated that General Motors (GM) and Chrysler have not gone far enough in their restructuring plans and need to step up their efforts to reorganize in order to receive additional government aid.

While the administration will continue to provide operating funds for the next few weeks, it has given both GM and Chrysler a final deadline, threatening bankruptcy if the beleaguered auto giants do not significantly increase their efforts to restructure their business.

Additionally, at the request of the White House, Rick Wagoner has stepped down as chairman and CEO of General Motors, with Fritz Henderson, GM president and chief operating officer, set to replace Wagoner as CEO.

Meanwhile, optimism surrounding this week's G20 summit has waned, as investors fear that earlier hopes that the countries will agree to a coordinated fiscal boost appear to have been crushed by skepticism in many European governments.

Against the European currency, the US dollar traded down during early deals on Tuesday. At 11:35 pm ET, the dollar touched a low of 1.3275 against the euro, compared to 1.3201 hit late New York Monday. The next downside target level for the US currency is seen around 1.341.

The US dollar that closed Monday's North American session at 1.4269 against the British pound declined to a 4-day low of 1.4341 at 11:35 pm ET. The pound-dollar pair is currently trading at 1.4321 with 1.459 seen as the next target level.

UK's sterling rallied against its major counterparts following the latest consumer survey report from the GfK Group showed that UK consumer sentiment indicator rose unexpectedly in March. The pound rose to a 6-day high against the euro and a 4-day high against the rest of majors.

Consumer confidence was higher for the second consecutive month in Great Britain, data consolidator GfK said, suggesting that measures to end the recession are starting to take hold. The increase was the highest level since May after the Bank of England slashed interest rates to a record low 0.5 percent.

The consumer confidence index came in at -30 versus analyst expectations for a score of -37 following the -35 reading in February. British consumers became more optimistic about the general economic outlook over the next 12 months, also upgrading their assessment of the state of the economy over the past 12 months.

Against the Swiss franc, the US currency edged down during Tuesday's early deals. At 11:40 pm ET, the dollar-franc pair touched 1.1444, down from Monday's closing value of 1.1486. If the pair falls further, 1.117 is seen as the next target level.

Traders are expecting the Swiss UBS consumption indicator for March, which tracks consumer spending in Switzerland, in the early European session today.

The US dollar that closed Monday's New York deals at 97.27 against the Japanese yen hit a 4-day high of 98.45 at 11:45 pm ET. On the upside, 98.8 is seen as the next target level for the pair. The dollar-yen pair is currently quoted at 98.19.

The yen weakened across the board after a government report revealed that Japan's jobless rate rose a 3-year high.

Japan's seasonally adjusted unemployment rate came in at 4.4 percent in February, the Ministry of Health, Labor and Welfare said today - slightly higher that forecasts for a 4.3 percent increase after the 4.1 percent increase in January.

Looking ahead, Japan's housing starts for February and the small business confidence report for March are expected at 1:00 am ET.

Investors expect a raft of economic reports in the upcoming session, including the German unemployment rate for March, French housing starts for February, Italian retail sales for January, Italy's preliminary inflation and the euro-zone CPI estimate-both for the month of March.

Across the Atlantic, the S&P/Case-Shiller home price index, which tracks monthly changes in the value of residential real estate in 20 metropolitan regions across the U.S., is scheduled to be released at 9 AM ET. Economists expect an 18.5% year-over-year decline in the 20-city composite house price index for January.

The Conference Board is scheduled to release its consumer confidence report for March at about 10 am ET. The survey, which is based on a survey of 5,000 US households, is expected to show that the consumer confidence index remained rise to 27 in March.

The results of the National Association of Purchasing Management-Chicago's business survey for March are scheduled to be released at 9:45 AM ET. Economists expect the business barometer index based on the survey, to be at 34.7.

Philadelphia Federal Reserve Bank President Charles Plosser is scheduled to deliver a speech on regulatory reform to the University of Chicago Booth School of Business at 1 PM ET.

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