Forex - Aussie up after siege ends in Sydney, HSBC flash China PMI due

Investing.com - The Australian dollar gained on Tuesday in the aftermath of a siege in the financial district of Sydney the ended in bloodshed with a hostage taker and two captives killed in an exchange of gunfire with police, while 15 others escaped.

AUD/USD traded at 0.8216, up 0.05% ahead of a central bank official's expected remarks and the closely watched HSBC China manufacturing gauge.

In Australia the speech and panel participation by Reserve Bank of Australia Assistant Governor (Financial Markets) Guy Debelle at the 27th Australasian Finance and Banking Conference at 1115 Sydney (0015 GMT) will be closely watched.

RBA Minutes for the December meeting is due just 15 minutes later (0030 GMT), with markets looking closely at any changes to the approach to a lower AUD.

In other data, the December HSBC Flash China Manufacturing PMI is released at 0945 local (0145 GMT). The final for last month came in at an even 50, with expectations at 49.9, dipping into contraction.

USD/JPY traded at 117.93, up 0.09% and EUR/USD at 1.2440, up 0.02%.

Overnight, the dollar traded largely stronger against most major currencies on Monday after a key U.S. industrial production gauge beat market forecasts.

Expectations for the Federal Reserve's Wednesday statement on monetary policy to shed a positive light on the U.S. economy gave the greenback added support.

The Federal Reserve reported earlier that industrial production rose by 1.3% in November, beating expectations for a gain of 0.7%.

Industrial production for October was revised up to 0.1% from a previously reported decline of 0.1%.

The report added that the capacity utilization rate, a measure of how full firms are using their resources, rose to 80.1% last month from an upwardly revised 79.3% in October, beating market calls for an unchanged reading.

The data boosted demand for the dollar on expectations that the Federal Reserve will tighten monetary policy next year.

The Federal Reserve is due to release its latest statement on interest rates and monetary policy on Wednesday, and expectations the statement will contain language describing a more robust U.S. economy firmed the dollar, which shrugged off a soft regional factory gauge.

The New York Federal Reserve’s index of manufacturing conditions fell unexpectedly in December, dropping into negative territory for the first time in almost two years.

The Federal Reserve Bank of New York reported that its index of general business conditions came in at -3.6 this month, down from 10.16 in November. Analysts had expected the index to rise to 12.52.

On the index, a reading above 0.0 indicates improving conditions, below indicates worsening conditions.

The Empire State manufacturing index is seen as an early forecast of the Institute for Supply Managements factory survey.

The euro, meanwhile, continued to soften due to the Greek government's recent decision to bring forward a parliamentary vote for president to this week

The move stoked fears that the anti-bailout Syriza party could take power as a result.

Government leaders have expressed fears that Greece could be forced to exit the euro zone if parliament failed to elect a new head of state by Dec. 29.

The US dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was flat at 88.72.

On Tuesday, the U.S. is to publish reports on building permits and housing starts.