Dollar maintains buoyant tone

The dollar extended its rally against the major currencies touching fresh 3-month highs against the euro.
The dollar was aided by fed chairman Alan Greenspan’s weekend comments and President Bush’s Budget speech. The White House proposed to reduce the deficit to $390 bn from the projected $427 deficit for 2005. The easing deficit concerns and the Fed's resolve to raise interest rates as the US economy expands meant that the dollar continued on its positive path. The dollar surged to a high of 1.2733, before settling to resume trading around 1.2760 levels.
Cable broke through the trend line moving lower to trade at 1.8560.
The Yen was taken aback by further rhetoric from Chinese officials playing down the revaluation of the Yuan. The dollar yen pair edged towards the 105 resistance, with further resistance eyed at 105.5.
With renewed strength in the dollar and optimistic view from the fed chairman would translate to more buyers for the dollar.
Markets will await the US trade balance and Current account balance from Germany for a further cue to currency movements.