Following the three-day weekend, the US Dollar struggles to find demand on Tuesday with the US Dollar Index trading in negative territory below 104.00 following a bearish gap at the opening. 

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November Goods Trade Balance and October Housing Price Index data will be featured in the US economic docket later in the day. US stock index futures trade in positive territory and the 10-year US Treasury bond yield holds steady near above 3.75%.

Earlier in the day, China’s National Bureau of Statistics (NBS) said that they had revised the country’s estimate of 2021 gross domestic product (GDP) growth to 8.4% from 8.1% previously. On a concerning note, reports suggest that China's hospitals are overwhelmed with the number of confirmed coronavirus cases rapidly rising since the country took steps to ease restrictions. Meanwhile, Japan Prime Minister Fumio Kishida announced on Tuesday that they will be requiring travelers from China to quarantine for seven days if they test positive for COVID-19 and added that they will be placing limits on airlines' requests to increase flights to China.

Nevertheless, the relatively upbeat risk mood stays intact in the European morning, making it difficult for the safe haven US Dollar to stay resilient against its rivals. Ahead of the Christmas holiday, the US Bureau of Economic Analysis reported that the Core Personal Consumption Expenditures (PCE) Price Index rose by 0.2% on a monthly basis, brining the annual rate down to 4.7% from 5% in October. Both of these readings came in line with analysts' forecasts.

EUR/USD capitalized on the selling pressure surrounding the US Dollar and climbed above 1.0650 in the European morning on Tuesday.

After having fluctuated in a narrow range during the Asian trading hours, GBP/USD started to stretch higher and was last seen trading above 1.2100.

USD/JPY stays relatively quiet below 133.00 despite the US Dollar weakness. Earlier in the day, Bank of Japan (BOJ) Governor Haruhiko Kuroda said that the decision to tweak the yield curve control strategy was "absolutely no a first step" towards an exit from ultra-loose monetary policy, making it difficult for the Japanese Yen to find demand. 

Gold price edges higher during the European trading hours and trades above $1,807 after having opened with a small bullish gap.

Bitcoin extends its sideways grind slightly below $17,000 early Tuesday. Ethereum struggles to find direction and moves up and down in a narrow channel at around $1,200.

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