Weak trade balance figures do the job on the dollar

The dollar remained range bound as thin trading prevailed in the markets in the absence of any major economic data.
Thursday’s US deficit balance figures at $ 56.4billion, which are still higher, threw the focus back on the US twin deficits as against improvement in data releases, paring the US currency lower against the majors.
Spurred on by the weak trade figures, the Euro rallied towards the 1.29 levels settling to end the week around 1.2870. With markets in doubt of further tightening by the fed, traders pared the dollar lower.
Sterling touched a high of 1.8712 and looks set to gain further in the week ahead.
The Asian currencies rallied against the dollar, as Yen soared after falling in three consecutive sessions earlier towards the 105 levels in Asian trades early today morning.
The dollar,s fate will now be decided by this week’s flurry of economic data from the US as well as Greenspan’s testimony. Markets will eagerly await Capital flow data from the US and the ZEW Survey from Germany, and the crucial retail sales as well as PPI figures from the US.