The US dollar and Japanese yen both gained as risk appetite faltered on news that China unexpectedly did not announce new stimulus measures and amidst indications that General Motors (GM) could be forced to file for bankruptcy protection.

Ten of the twelve Fed districts reported "weaker conditions or declines in economic activity," and the sole exceptions were the Philadelphia and Chicago Fed districts, which reported that their respective economies "remained weak."

Looking ahead to Wednesday, conditions in US non-manufacturing sector are anticipated to have worsened in February as the Institute for Supply Management (ISM) index is estimated to fall to 41.0 from 42.9.

Looking ahead to Tuesday, the National Association of Realtors (NAR) is expected to announce that pending home sales fell 3.5 percent in January following a 6.3 percent increase in December.

Flight to quality resumed on Friday, leading the US dollar to gain against nearly every currency as the S&P 500 fell to its lowest closing level since December 1996.

The US dollar ended the day modestly lower against most of the majors, with the exception of the ultra-weak Japanese yen, as the currency consolidates within an ultra-tight range.

The US dollar surged against the major currencies amidst persistent risk aversion and as fundamental releases from other regions made conditions in the US seem relatively solid.

US economic news was very disappointing this morning, as the S&P/Case-Shiller home price index tumbled by a record 18.23 percent in Q4 and the Conference Board’s consumer confidence index hit the worst level since record keeping began in 1967.

While the US dollar and Japanese yen did end the day lower across most of the majors compared to Friday’s close thanks to sharp declines on Sunday, they strengthened throughout most of the New York trading session.

Looking ahead to next week, there will be a handful of events that US dollar traders will need to watch.