The dollar is currently undergoing a broad consolidation phase following significant price fluctuations towards the end of last week. Primarily, the greenback remains within the trading ranges observed yesterday, which were themselves contained within those of last Friday. While most G10 currencies are showing a slight decline today, exceptions include the Japanese yen and Norwegian krone, both posting marginal gains.

Across Asia Pacific equities, most markets are on an upward trend, with mainland China experiencing positive momentum. Meanwhile, Europe's Stoxx 600 is retracing roughly a third of its nearly 0.4% gain from yesterday, and US index futures are also trimming their gains.

February WTI faced a 4.1% loss yesterday, marking its most significant decline since November. However, it has recovered nearly half of that loss today, rising back above $72.

Asia Pacific 
The ongoing moderation of Tokyo's Consumer Price Index (CPI) appears favorable for the national trend, suggesting reduced pressure on the Bank of Japan to abandon its negative overnight interest rate target. Tokyo's CPI, which peaked at 4.4% in January 2023, ended the year at 2.4%, the lowest since mid-2022. Australia's retail sales rebounded in November by 2.0%, surpassing the 1.2% median forecast in Bloomberg's survey, following a 0.4% slip (initially -0.2%) in October. While this marks the strongest increase since 2021, it may not signify a full-fledged recovery.

Australia's economy grew by almost 1% in H1 2023 but slowed to 0.2% in Q3, and Q4 is expected to reflect a similar pace.

The dollar briefly dipped below the pre-weekend low (~JPY143.80) against the Japanese yen in the North American afternoon, reaching nearly JPY143.65. It extended its decline in early Asia Pacific trading, reaching almost JPY143.40, before rebounding to JPY144.30 and stalling.
The Australian dollar, despite recording an inside session yesterday, closed firmly, marking the fourth consecutive session of lower highs.

Europe
Before the impact of Covid-19, Eurozone unemployment stood at 7.5%, reaching a peak of 8.6% in August/September 2020. Throughout 2023, it fluctuated around 6.5%-6.6%. Since August of that year, the unemployment rate has held steady at 6.5%, reaching a new low of 6.4% in December.
Separately, Germany reported a disappointing 0.7% drop in industrial output for November.

The euro traded within a quarter-cent range around $1.0950. The market lacks near-term conviction, and the consolidative phase persists.
Sterling appears to have found support near $1.2720 in the European morning and seems poised to push higher, retesting the upper end of its recent range in North America today.

America
The US is set to report the November trade balance today. Despite the overvalued dollar and growth differentials, the nominal goods balance remained relatively stable in the first 11 months of 2023 compared to the same period in 2022, even as the goods balance deteriorated in each of the three months through November.

Canada will also report its November merchandise trade balance, reflecting a noticeable decline in its trade goods balance this year, likely influenced by both lower prices and weaker foreign demand.