Stock markets dipped on Tuesday in cautious trade amid vaccine rollouts and US stimulus hopes.

The pound slumped for a second day running with post-Brexit trade talks on a knife-edge.

The yen dipped against the dollar but soon recovered after Japan's government approved more than $700 billion in fresh stimulus to fund projects from anti-coronavirus measures to green tech.

Meanwhile, the euro climbed on data showing German investor confidence rebounded in December, buoyed by hopes that vaccines — expected to win approval for general use in the EU imminently — could help end the coronavirus pandemic.

"Risk appetite is struggling to find direction amid Brexit headlines, rising COVID-19 case counts, and possible further US sanctions on China on the one hand and hopes for US fiscal stimulus and US vaccine approval," said Axi strategist Stephen Innes.

"Investors are pinning their hopes on the ultimate holiday stocking stuffer, which is the capacity for [US] stimulus overwhelming a near-term downturn."

Nurses on Tuesday cheered as an elderly British grandmother became the first person in the Western world to receive an approved vaccine against COVID-19, at the start of a marathon campaign health officials hope heralds a fight-back against the global pandemic.

Last week, UK regulators became the first in the world to approve the Pfizer-BioNTech vaccine for general use, and the first jabs were administered across the country from early Tuesday.

It comes as the outcome for a post-Brexit trade deal remains up in the air, with British Prime Minister Boris Johnson preparing to visit Brussels for talks with EU chief Ursula von der Leyen.

With the two sides divided over fishing rights, rules for fair trade and an enforcement mechanism for regulatory standards, there is a growing fear a deal will not be done before the December 31 deadline. 

Analysts, meanwhile, said that the next leg-up for equities would be news that US lawmakers had finally reached an agreement on a new rescue package for the battered economy.

Democrats have largely thrown their support behind a bipartisan proposal worth $908 billion while there is optimism Republicans will eventually come on board.

But US stocks opened lower, with the Dow slipping 0.2 per cent in the first couple minutes of trading.

"After a recent rally to record highs, US stocks continue to retreat as the markets assess the likelihood of further fiscal relief as talks appeared to have stalled," said analysts at Charles Schwab brokerage.