The dollar barely budged versus other major currencies Tuesday morning in New York as traders braced for another round of gloomy economic data, including a reading on the deeply troubled housing sector.
At 10 am ET, traders will take in the release of the National Association of Realtors' report on pending home sales in the month of December.
Pending home sales is forecast to remain near a record low in December. Analysts are expecting a reading of 82.3, same as November's awful reading.
The dollar was on pause versus the euro Tuesday morning, after pulling back from a monthly high yesterday. The dollar stayed near 1.2850, even after data showed that German retail sales unexpectedly fell for the third straight month in December.
Tuesday, the Federal Statistical Office said turnover in retail trade in real terms fell 0.2% month-on-month in December after adjusting for calendar and seasonal swings.
Meanwhile, Eurozone producer price inflation slowed for the fifth straight month in December, indicating easing inflationary pressure on the economy.
Tuesday, the Eurostat said industrial producer price inflation in EU15 slowed significantly to 1.8% on a yearly basis in December from 3.3% in November. Economists were expecting the producer price inflation rate to slow to 2.1%.
The dollar was also range-bound versus the sterling, holding near 1.4200 through Tuesday's early hours. The dollar has leveled off since hitting a 23-year high of 1.3501 a few weeks ago.
UK's Building Societies Association, or BSA, urged the Bank of England Monday not to cut the base rate further on Thursday, when its monetary policy committee meets to review the policy.
Director General of the BSA, Adrian Coles said, "The cuts in interest rates have had a severe impact on savers. The reductions, from 5.75% in 2007 to 1.5% have seen incomes from savings drop by almost 75%."
The dollar continued its run off choppy trading versus the yen, bouncing back and forth around 89.50.
Tuesday, the Bank of Japan decided to buy stock holdings worth 1 trillion yen from financial institutions, hoping to stabilize the financial system by reducing banks exposure to equities markets near the end of the fiscial year at the end of March.
The dollar edged slightly higher versus the petro-linked loonie as the price of oil held near $40 a barrel. The buck hit a 10-day high of 1.2500, extending its gains from the previous few sessions.
