Oil prices recovered from seven-year lows as investors close short positions and await the Fed interest rate decision tomorrow. Brent futures traded at $38.04 per barrel, after falling yesterday to $36.76, perilously close to 11-year lows. U.S. crude futures changed hand at $36.25 a barrel, after rebounding by 2.0% yesterday from a low of $34.53. Oil is expected to remain pressured however, as supply keeps rising, especially after Iran resumes pumping more after nuclear-related sanctions are lifted. Also compounding the oil woes, a less-severe than expected winter in the northern hemisphere is lessening the need for heating energy, hence making demand weak in a time when supply is peaking.

Asian shares were mixed, as investors cheered the stabilization in oil prices but remained worried about their future prospects. Japan's Nikkei led the decliners, giving up 1.36%, affected by a surging yen, which is negative for exporters. China's CSI300 for the biggest listed companies in Shanghai and Shenzhen was flat at 3,711, while Korea's KOSPI advanced 0.14%. Australia's S&P\ASX 200 index slid 0.39%, while India's Nifty slipped 0.15%.

Wall Street closed Monday on a more upbeat spirit, as investors view the expected rate hike as a sign of strength in the economy. Dow Jones closed up 103 points, or 0.60% to 17,368. NASDAQ gained 18 points, or 0.38% to 4,952. S&P 500 added 10 points, or 0.48% to 2,021.

Dollar weakened further on Tuesday, with its index dipping 0.26% to 97.49, limping away from a 12-year peak at 100.60 reached earlier in the month. Markets have already priced in the expected rate hike tomorrow, but dollar investors are worried about the future pace of the hikes, which would probably be slow and gradual. Dollar fell 0.26% against the euro to 1.1021, coming close to a 6-week low reached overnight. It slipped 0.16% against sterling to 1.5168. Dollar gave up 0.13% against the yen, trading at 120.87, near another 6-week trough at 120.34.

A host of data is awaited today; from Britain, CPI for November is forecast at 0.1% y\y, which would be good for sterling after two consecutive months of negative inflation.

From the U.S., CPI for November is expected at 0.5% y\y, much better than October's 0.2% growth, and would only make the Fed's job of raising interest rates easier and more justifiable.