Euro saw some very good price action in the NY session, but the early highs near 1.4580 (which look to have been driven by massive stops going off above the 1.4545 zone) would be as high as the pair would go. The pair now remains choppy around the 1.4500 zone and we expect the consolidation to continue as the market braces for both the ECB interest rate press conference and US retail sales tomorrow †both at 830am ET. We expect little earth-shattering news out of the ECB (with the risk being that they offer some lip service with regards to the Greek debt debacle, potentially weighing further on Euro) but look for some upside risk to the US retail sales report. The market is expecting a modest 0.3% monthly add but the news from the major retailers was that holiday sales actually came in better than expectations. Should the number beat the market forecast decidedly, we could be staring at Euro 1.4300 in short order. On the flipside, a negative sales number would prove detrimental to the US dollar. Keep a close eye on this one tomorrow.

The Fed's Beige Book, which includes a plethora of anecdotal evidence with regards to the US economy, showed just a modest mark-up in activity. The best headline to cross the tapes was that 10 out of the 12 districts reported some kind of economic improvement. There was no upgrade to the generally weak labor market and loan demand continued to decline (perhaps the government should take a read of this section before bickering about banks not lending †the fact remains that most folks do not want to add to their already bloated debt piles). When all is said and done, the marginal improvement helped the US dollar at the margin and in broad terms the buck ended the day about flat after a pretty rough overnight.