Data:

05:00 Japan Eco Watchers Survey: Current 43,6

05:00 Japan Eco Watchers Survey: Outlook 41,4

The dollar rose for a third day against the euro on prospects an extension of tax cuts will bolster an economic recovery in the U.S.

The greenback gained as Treasury yields surged after President Barack Obama agreed to extend Bush-era tax cuts for two years. A report tomorrow is forecast to show U.S. initial jobless claims declined.

The Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners including the euro, yen and pound, rose 0.3 percent to 80.196, after gaining 0.5 percent yesterday.

Moody’s Investors Service Inc. said yesterday that Obama’s agreement to extend the tax cuts won’t lead to a downgrade of the nation’s Aaa credit rating. Ten-year Treasury yields surged the most since June 2009.

Losses in the euro were limited as Irish Finance Minister Brian Lenihan won the backing of lawmakers in the first votes on his 6 billion-euro ($8 billion) budget.

EUR/USD: the pair shown low in the field of $1,3190.

GBP/USD: the pair shown low in the field of $1,5670.

USD/JPY: the pair shown high in the field of Y84,00.

UK data includes the 1100GMT release of the latest CBI Industrial Trends Survey. 01:35 12/08 US: US data is limited for Wednesday but starts at 1200GMT with the weekly MBA Mortgage Applications Index and is followed at 1500GMT by Quarterly Services Revenue data and at 1530GMT by the weekly EIA crude oil stocks data.