With US markets not yet open after the President's day holiday and corporate orders flows essentially non-existent the majors traded in very tight ranges tonight as most market participants remained on the sidelines. On the economic front Euro-zone data offered little new information as French GDP data and CPI numbers printed in line with growth registering a very tepid 1.2%. Meanwhile the Euro-zone Trade Balance printed at -2.4 Billion in December but the prior month was revised materially higher from 0.1 Billion to 0.8 Billion and that news boosted the euro back to the 1.1920 level. This is the third month out of four that the EZ has registered a deficit rather than a surplus as skyrocketing energy costs weigh on the Balance of Trade.

Switzerland, remains the one area with unabashedly positive news flow as both Retail Sales and the Trade Balance reported healthy gains. Retail Sales jumped 3.1% from the year earlier and Trade Balance surplus expanded to 1.2 Billion  from 0.51 Billion the period prior.  The country continues to demonstrate much better economic performance both on the growth and balance sheet basis than its far larger neighbor. The EUR/CHF cross has strengthened over the last month on interest rate differential expectations as ECB rhetoric has been much more hawkish than the commentary from SNB, but if the Swiss eco data continues to show better relative results the speculative flow in the pair could begin to reverse.

Finally, the market will scrutinize today's FOMC minutes for any clues to Fed actions after the March meeting. A rate hike to 4.75% is a given in the FX market but traders will try to ascertain the likelihood of 5% rates in the first half of 2006.  Any doubt to that thesis and the greenback could see  selling as interest rate hikes have been the primary support for the dollar rally all year long.

Boris Schlossberg is a Senior Currency Strategist at FXCM.