Dollar gives up gains as markets brace for the flurry of events this week

The dollar gained in the European session as markets anticipated good data release from the US ahead of a key week.
Euro moved to 1.2976, but recovered to trade around the 1.3040 levels despite positive data from the US, as markets braced for the action packed week.
The data releases showed an improvement in the Chicago PMI to 62.4 and an increase in the employment index to 52.8. The dollar was boosted further as Personal incomes shot up by a record 3.7% last month and a consequent increase in personal spending.
Yen moved towards the 103.50 levels on further rhetoric regarding the Chinese revaluation. Without any concrete outcome of the revaluation of the Yuan, the yen along with the Asian currencies are expected to reel under pressure.
Cable drifted lower despite an upswing in industrial trade to –3 and a surge in the consumer confidence index.
The data array expected - mainly the manufacturing PMI releases from the Eurozone, UK and the US could set the tone for a brief course before traders step back again ahead of Wednesday’s FOMC decision.