The dollar was little changed against the euro and yen as investors shrugged off mixed U.S. data to await the conclusion of a key Fed meeting on Wednesday.
The euro was supported by overwhelming demand for the EU's next generation 10-year issue nL5N2NX1GW that was doubled to EUR20bln and was still seven times oversubscribed, which forced competing 10-year Bund yields and spreads to Treasury yields higher.
An avalanche of U.S. data, from retail sales, PPI, Empire State, industrial production and NAHB, with substantial undershooting and overshooting to forecasts and chunky revisions nL2N2NU0BI left markets none the wiser.
March's massive, upwardly revised 11.3% m/m retail sales surge in response to fresh government stimulus checks and the pandemic reopening left a lull in spending in May, as more purchases went to in-person services rather than goods.
But overall retail sales goods spending remains 20% above pre-pandemic levels, according to Citi.
Soaring PPI, above-forecast industrial production, stocks near record highs, credit spreads flimsy and more fiscal stimulus being planned tend to favor the view that the Fed's argument for remaining in emergency accommodation mode is weakening.
Nonetheless, EUR/USD came off its 1.2102 lows after the headline miss in retail sales, since peaking at 1.2131 on EBS.
But further examination of the sales, PPI and IP data left it up just 0.02% waiting for the Fed.
Sterling was down 0.21% after a tumble to 1.4035, its lowest since May 13, unimpressed by the UK-Australia trade agreement nL2N2NU0BI and hobbled by Monday's extension of UK COVID restrictions.
Monday's bearish first daily high below the 21-day moving average since April 13 and Tuesday's break below the up trendline from April's lows and bearish daily tenkan-kijun cross set the stage for the morning breakdown.
But the 1.4035 low held the 38.2% Fibo of the April-June rise at 1.4028, limiting the damage.
USD/JPY was flat in a tight 109.995-10.17 range, remaining in a choppy uptrend from April's lows but needing help from Treasury yields and a more inflation-attentive Fed to retake June's twin 110.325 highs or make a break for March's 110.97 pandemic recovery peak.
A dovish Fed could bring moving average props at 109.695 and grouped in the 109.24-44 range back into play.
Emerging market and commodity currencies fell ahead of the Fed, as any signs of sooner tightening would be viewed as a potential threat.
Bitcoin and ether consolidated gains from the start of the week instigated by Elon Musk's latest musings.
Demand for the U.S. 20-year re-opening was robust, helping keep the yield curve flatter versus steepening in Europe.
With no major U.S. data on Wednesday, the Fed will have the spotlight alone.
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