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The US dollar and Japanese yen dipped lower across the majors on Monday as optimism on global growth helped to spur demand for riskier assets, such as equities and the commodity dollars. According to MasterCard Advisors’ SpendingPulse, US retail sales rose an estimated 3.6 percent between November 1 and December 24 as consumers ramped up their purchases the week before Christmas and online. Additionally, the Dallas Fed manufacturing outlook survey showed improving sentiment during December, as the index rose to two-year high of 3.8 from 0.3. A breakdown of the report shows that new orders and prices are on the rise, but the production component eased back, suggesting producers are trying to limit inventory buildup.

Looking ahead to Tuesday, the Conference Board's measure of consumer confidence is expected to rise for a third straight month in December to 53.0 from 49.5. Other indicators of consumer sentiment, such as the University of Michigan's index, bode well for this upcoming release as the report showed an improvement to 72.5 in December from 67.4. All told, further increases would add to evidence that spending rose through the end of December as consumers shopped ahead of the holidays. Additionally, the S&P/Case-Shiller home price index is expected to rise for a sixth straight month in October to a nine-month high of 147.00 from 146.51, suggesting that the government's efforts to stabilize the housing market through tax incentives for buyers has been working. Indeed, last week's release of NAR existing home sales has indicated a steady increase demand, though sales of new homes have remained volatile.

Overall, it’s important to keep in mind that volumes will remain low through the rest of the week, which is likely to translate into range-bound price action until traders return next week. When it comes to the JPY crosses, though, last week’s break higher in the S&P 500 signals increased bullish potential.