The dollar picked up slightly against the euro and the yen, though trade was muted by the US public holiday, while the pound fell following weaker-than-expected data on UK factory gate inflation
Though UK input prices showed a sizeable increase due recent sharp rises in energy prices, the market focused on the fall in output prices as a sign that competitive pressures continue to trouble the country's manufacturing sector
"Higher raw material costs currently represent a squeeze on margins rather than an imminent inflation threat," said John Butler at HSBC "The impact of higher costs is being lost along the supply chain rather than exploding into a flood of consumer inflation," he added
Though higher raw material costs raise the prospect of higher prices further down the line, if tomorrow's CPI inflation data turn out to be benign, speculation that the Bank of England could cut interest rates again in the coming months will be reignited
Also key for the UK rate outlook will be labour market data on Wednesday and retail sales numbers Friday
Elsewhere, the dollar picked up slightly against the euro and the yen, rebounding modestly after Friday's heavy losses which saw the US currency all but wipe out the rest of the week's gains
With the US Federal Reserve looking set to stop hiking interest rates soon while the European Central Bank is already starting to raise euro zone rates, the dollar is expected to remain under renewed pressure, however
Key US data this week include December industrial production on Tuesday, December CPI and TICS portfolio flows data on Wednesday, and the University of Michigan consumer sentiment index on Friday. In Europe meanwhile, focus will centre on Wednesday's inflation data, which are expected to confirm that the European Central Bank is right to be concerned about inflationary pressures in the euro zone.