A slight pullback in the dollar as equities continue to move higher

The greenback is losing some ground as we get move closer towards US trading with USD/JPY, GBP/USD and USD/CHF near flat levels on the day now. Commodity currencies are also off their lows with AUD/USD inching towards 0.7140 and NZD/USD at 0.6740 at the moment. There isn't much of a catalyst but with the dollar's recovery earlier failing to breach any key levels, it's hard for buyers to keep up with an extension unless there is more of a catalyst to drive the move.

Markets are starting the year with a focus on a more dovish Fed and concerns surrounding the US economy. Small indications like the NFIB small business optimism index earlier- which looks to have peaked - will slowly build into the bigger picture of economic sentiment in the US. That said, expect those two themes to remain prominent among currency traders and add more two-way movements in trading the greenback.

As the dollar is moving a tad lower, US equity futures are trading near session highs for the day. E-minis are up by 0.8% currently with gains in pre-market mostly led by tech stocks.