Following yesterday’s sell-off, the greenback was largely unmoved against the majors as currency traders showed increasing reluctance to enter into new positions ahead of the upcoming busy week. The euro is determined to preserve this week’s gains while approaching the highest weekly close in over a month. The yen is also showing resiliency as it looks to stem the tide of a 12-point drop in a period of just 3 months. Meanwhile, the pound and the Swiss franc are in consolidation of yesterday’s near-200-pip moves that dealt USD substantial technical damage.

US Consumer sentiment, as measured by University of Michigan's preliminary index, continued to show an improvement, coming in at 88.7 in December after a reading of 81.6 last month. November’s increase telegraphed a jump in consumer confidence as measured by the Conference Board, which easily topped last month’s expectations of 90.0 with a reading of 98.9. A gradual return of consumer sentiment to levels seen before this summer’s hurricanes, 96.5 in July being the highest, is seen as beneficial to the dollar when considering that US consumer spending represents 70% of the economy.

On the downside, the Commerce Department reported that inventories at US wholesalers rose only 0.2% in October, below analysts’ expectations of 0.5%. Sales were seen rising 1.2%. October wholesale sales were particularly weak as compared to strong gains of 2.4% in September and 1.8% in August. Consistently declining inventories are seen as largely negative for the economy, signifying companies’ rush to adjust production and stock levels in the face of expected diminishing demand growth.

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