The dollar weakened against the euro today as dealers were unimpressed by better-than-expected US retail sales and focused instead on the likelihood that tomorrow's trade figures show a record deficit.
The single European currency was at $1.3310 in late-day trade against $1.3218 late on Friday in New York.
Analysts said that the market appeared to be in a holding pattern before committing to any further dollar buying following last week's relief rally.
Tomorrow's US trade balance is only the beginning. Wednesday brings the monthly report from the US Treasury on cross-border portfolio flows, while quarterly US current account deficit numbers are scheduled for release on Thursday.
Each of these is potentially damaging for the dollar. Conversely, any stronger-than-predicted data may well help the dollar recover some more lost ground.
Meanwhile, markets shrugged of stronger-than-expected US retail sales data ahead of the important end of the year holiday season.
US retail sales remained strong despite a second straight month of weakness in the car sector, according to Commerce Department figures. Sales rose 0.1% in November for the third straight monthly increase, beating the consensus estimate of no change.
Also firmly in the spotlight this week will be tomorrow night's Federal Open Market Committee decision on US interest rates, where a further quarter point hike is expected. The market in particular will be perusing the Fed's accompanying statement for clues on whether further interest rate hikes can be expected.
There is also plenty of data due out elsewhere in the world this week, with Wednesday's Japanese Tankan survey and Germany's Ifo index on Friday - both key indicators of business confidence - firmly in focus.
