The dollar was lower versus a basket of currencies today as risk sentiment decreased following a lack of US data releases from the economic calendar. December wholesale inventories disappointed investors, declining 0.2% on expectations of an increase of 1.1%. US economic data has recently turned out positive notes that have brought a strong bid for the dollar, particularly since the start of the year. The lone exception being the November payrolls data that failed to meet economists' expectations.
In China, the PBOC released its recent FX reserve data, indicating its FX reserves rose USD 199 Bn in Q4 2010 to come in at a record 2.847 Trn. The yearly increase in FX reserves grew by USD 448 Trn compared to USD 453 Bn the previous year and 472 Bn in 2007.
At the end of yesterday's trading day the EUR/USD was higher at 1.2966, up from an opening day price of 1.2943. The GBP/USD rose as high as 1.5638 before closing back at 1.5600 after opening the day at 1.5557. The USD/CHF was higher at 0.9737 from an opening day price of 0.9685. US equities were stronger today with the Dow Jones Industrials Average trading up 34 points to close at 11671.88 for an increase of 0.30%.
Today's trading will see a pickup in activity from the economic calendar with the release of US import prices at 13:30 GMT followed by the release of the Fed's Beige Book at 19:00 GMT. The Beige Book is expected to confirm a pickup in US economic activity over the past three months. Support for the EUR/USD come in at this week's low from the consolidation pattern at 1.2870. Resistance is located at the December 23rd low at 1.3050.