The Dollar gained against its main rivals overnight – the Euro, Pound and Yen – but gave up its gains against the latter two. The move in favor of the greenback may be traders positioning ahead of the start of the second quarter earnings season, while the weakness in the Euro comes ahead of several debt auctions from troubled nations later this week – Greece, Spain and Portugal.

US data has shown that the US recovery is slowing as data on home sales, retail sales and consumer confidence came in weaker than expected the past few weeks, though Friday saw a more positive tone to US retail sales from the International Council of Shopping Centers. Still, traders may be on edge to find out how the leading companies in the US performed in the second quarter and what it meant for earnings. There are some signs, like rising working hours and higher paychecks which could mean higher consumer spending ahead, and that the weakness in recent US indicators was payback for stronger data earlier. Still, the stock market has been rocky the past 3 months, and earnings season will be an important leading indicator for investor sentiment of the economy going forward.

In Europe, Greece is set to sell €1.25 billion of 26-week bills on Tuesday, with auctions from Portugal and Spain coming later in the week. Greece of course has been the epicenter of the euro-zone sovereign debt crisis, and investors are cautious ahead of its debt auction. European bank stress test results are expected on July 23rd as well. Therefore event risk is rather high heading into this week and next.

The Yen was weaker due to politics, as an election for the upper house their showed the leading coalition not securing enough votes to hold onto a majority. The Democratic Party of Japan and its coalition partner the People’s New Party, together won only 44 of 121 seats contested, much fewer than the 56 seats the government needed to keep its majority. The loss means the administration of Prime Minister Naoto Kan will have a tougher time in passing bills to help efforts to improve Japan’s fiscal health and can limit how swiftly the government can move to ward off any further slowdown in Japan’s recovery. Still, the Yen remains a safe haven and moves driven by political changes are usually short lived.

In the UK, the Pound fell for a third day as the current account deficit was £9.6 billion ($14.4 billion) in the first three months of the year, the widest since the third quarter of 2007. That was about four to five billion pounds worse than expected. There is a good amount of data upcoming for the UK including inflation – with consumer prices expected to slow to an annual pace of 3.1% in June from 3.4% in May- and monthly jobs figures that are expected to show jobless claims down 20K in June, after a 30.9K decline in May.