If the sales data is close to expectations, then official comments on the dollar will be very important for near-term trends

The dollar was unable to break Euro support levels below 1.54 on Monday and weakened steadily back to lows around 1.5570 in New York

There will be further speculation over official efforts to push the US dollar stronger, especially as this will be important in helping trigger a downward correction in oil prices. The comments from US and European officials will remain under close scrutiny in the short term with the EuroGroup finance ministers due to meet on Tuesday.

Any sign of more decisive and aggressive rhetoric in support of the US currency would provide significant dollar support. ECB Chairman Trichet retained a firm tone on interest rates in comments on Monday, although there are some tentative signs that the bank is edging towards a more relaxed stance and the speculation over a policy shift will increase if the Euro-zone economic data deteriorates

The dollar was little changed initially on Tuesday, but with a slightly firmer tone and a test of levels below 1.5480 ahead of the US retail sales data and scheduled comments from Fed officials.