US Dollar
Though the scheduled economic releases on deck for the dollar were well below first tier status, the dollar had no problem finding a bid. The weekly claims data and Novemberâ�,��"�s import price index for November were the only scheduled indicators. Loosing some of its esteem since NFPs have stabilized over the past few months, initial claims through December 9th, slowed to a 304,000 pace, versus 320,000 expected. This read simultaneously proves the jump two weeks before was temporary and puts initial estimates for December payrolls on an early strong footing. The more remarkable indicator was the Import Price Index. Accounting for an estimated 17 percent of all goods consumed in the US, imports reported a turn back to inflation through November. With energy prices leveling out after two months of 10 percent-plus drops, the import gauge was able to put up a 0.2 percent rise for the month. This bodes well for tomorrowâ�,��"�s CPI read, whose headline numbers have also struggled with the recent tumble in energy prices. Besides consumer inflation though, a number of indicators will fall into the marketâ�,��"�s crosshairs. Also on the menu are the Empire survey, TICS, and Industrial production.

Euro and Swiss Franc
It was more policy maker rhetoric that added some support for the European currencies, although no sign of that existed with price action siding with US dollar bulls for the most part.  During the overnight and New York sessions, multiple comments could be seen coming from European Central and Swiss National bankers, adding fuel to the fire that was the hike in the Swiss rate.  In the overnight, led by Chairman Roth, policy makers in Switzerland opted to increase benchmark rates by another 25 basis points to 2 percent.  Already mostly priced into the market, the decision left some considering upside speculation on a continued hawkish bias by the central bank.  According to Chairman Roth, interest rates can be expected to increase, however gradually, as consumer spending and growth continue to remain robust in the economy.  Consumer sentiment, additionally, was suggestive of higher appreciation in the short term, lending to belief that consumer spending is likely to continue to support growth as the exchange rate becomes a slightly less concern of monetary leaders.  In theory, the comments should have boosted the underlying franc.  However, coupled with dollar data, sentiment is shifting to the possibility that the current tightening bias maybe coming to an abrupt end in the new year, continuing the carry seller bias the currency has attained for most of the year.  Subsequently, European official comments were also tossed to the way side as the underlying currency continues to range between 1.3100 and 1.3200.  In the early afternoon, ECB board member Axel Weber, in an interview with Faz newspaper was quoted as saying that the central bank must act â�,��"decisivelyâ�,� against inflation risks.  Hawkish by nature, the comments were followed up by suggestions that the Euroland economy shouldnâ�,��"�t worry about growth as rates are unlikely to diminish current supportive factors.

British Pound
There was fodder for the British pound bull on the session, even as traders pared back sterling longs ahead of tomorrowâ�,��"�s full slate of economic data.  For now, sentiment still sides with another round of rate increases as retail sales figures unexpectedly rose for the second month running.  In November consumers increased spending on retail items to the tune of 0.3 percent, above the consensus of 0.2 percent for the month.  Subsequently, the previous monthâ�,��"�s figure was revised higher to a full 1 percent as online shopping ahead of the holiday season boosted the prior increase.  Reflective of an expanding economy, the survey purports previously positive reports including the fastest acceleration of inflation in nine years and unemployment declines the most in almost two years.  Taking all of these figures into consideration, the market bias is expecting another round of hikes in the coming quarter as Governor Mervyn King and fellow policy makers continue to remain concerned over underlying inflation potential. Consequently, futures are pricing in the likelihood of a move in the month of March with the short sterling curve rising 1 basis point higher.  Separately, adding to some sterling woes on the session was news that Prime Minister Blair would be questioned in a Cash-for-Honor probe by police.  The investigation, surrounding potential selling of political honors in return for cash, is dependant on loans made to the Prime Ministerâ�,��"�s political party.  Although not pertinent to the present condition of the sterling, it still leaves some angst for potential bidders to consider. 

Japanese Yen
Continued weakness in the Japanese Yen is a function of tradersâ�,��"� expectations of a positive Tankan survey result. Although used by central bankers to dictate monetary policy, tonightâ�,��"�s report will garner attention but not to the levels some might expect.  Anticipated to improve across the board in the third quarter, especially the all industry CAPEX figure, the report will likely be tossed to the wayside on previously stated central bank intentions.  Prior to the release, policy makers have been noted to make reference to a likely stall on the decision in the near term as some in the Bank of Japan remain unconvinced of the recent turnaround in the worldâ�,��"�s second largest economy.  Yes, production and manufacturing have ticked higher as well as inflationary pressures, but weakness in the consumer sector remains a questionable part, keeping any formidable hikes at bay for the moment.  However, the results will more than likely give yen bulls something to talk about going into next year and keep central bankers on the look out for that final decision making report that should give the undervalued currency some support.

Commodity Currencies (CAD, AUD, NZD)
In an unusual twist, the commodity blocâ�,��"�s calendar was entirely dominated by New Zealand indicators. The rush began with the sixth consecutive rise in retail sales in October, suggesting RNBZâ�,��"�s Bollard has a task in cooling spending habits.  Besides the sales report though, Novemberâ�,��"�s business confidence survey and third quarter factory activity both fell short of expectations.

Kathy Lien is the Chief Currency Strategist at FXCM.