Dollar starts the week with some strength on comments from Russia and pull back in oil prices. Just ahead of BRIC summit, Russian Finance Minister Kudrin said that it's too early to speak of an alternative for dollar as reserve currency and fundamentals of the greenback are still in good shape. Kudrin also said there is no plan to change the structure of Russia's investments significantly in the near future. On the other hand, dollar is lifted by further retreat in crude oil what breaks 71 level briefly and looks set to extend lower. Gold also dips further to as low as 932.4 so far. EUR/USD takes out 1.3911 minor support while USD/CHF breaks 1.0857 minor resistance. Focus will turn to corresponding levels in GBP/USD and AUD/USD for further evidence of dollar's strength.

Looking at the dollar index, the break of 80.63 minor resistance today affirms the view that pull back from 81.47 has completed at 79.19 already and should now encourage further rebound to 81.47 resistance first. Such development is also inline with the view that whole fall from 89.62 has completed with three wave down to 78.33 already. Break of key resistance of 82.63 (38.2% retracement of 89.62 to 78.93 at 82.64) will further affirm the view that dollar index is inside a medium term wide range consolidation between 77.69 and 89.62 and there is no change in the longer term up trend yet. On the downside, a break below 79.19 will delay the bullish case but we'll still look for reversal ahead of 77.69 key long term support.

G8 finance ministers acknowledged signs of stabilization in the global economy and said that the IMF should now study the best way to roll back from the prior crisis stimulus measures taken even though it's still early to shift strategies. US Treasury Geithner said that the policy actions have brought a very important reduction in concern of deep global recession, reduced deflation risks and systematic risks in financial system. But it's not a point where we can say we have a recovery in place. UK FM Darling said there will be a return to growth towards the of the year but we're not there yet. IMF MD Strauss-Kahn said recovery is weak and many actions still need to be taken. Growth as average will only come back at beginning of 2010 and unemployment will peak at start of 2011.

On the data front, Swiss combined PPI dropped -0.3% mom, -5.0% yoy in May. US Empire State manufacturing index is expected to dropped from -4.55 to -5.1 in Jun. TIC capital flow is expected to drop from 55.8b to 52.9b in April. NAHB housing market index is expected to improve from 16 to 17 in Jun.