A new week has started and the sentiment is only growing more cautious and bearish across the board. The range has been tight this morning for majors with the lack of major fundamentals today, yet the dollar continued the race upwards for the fourth consecutive session.

The fear extended late Friday following the unexpected move by India on interest rates. The tightening move, the first of its kind in two years, raised fears over such steps from the region, especially China and India, and the negative outcome on growth which will slow the pace of the global recovery.

On the back of the jittery sentiment, the dollar managed to extend its gains against the six major traded currencies gauged by the dollar index. Adding to that, the dollar is benefiting from the secured vote to pass the healthcare bill, which is considered Obama's biggest triumph since taking office. Mid-European session, the index was trading on the rise as U.S. markets enter the market around 80.90 rising off early lows set at 80.69 after opening the session today at 80.84.

Regarding the single 16-nation currency, the euro, it continues to be burdened by growing budget concerns ahead of the awaited EU summit this week. Angela Merkel of Germany insists on her reluctant stance and harsh rhetoric regarding aid to Greece. In comments yesterday she reiterated her stance and prepared markets for the worst, assuring they do not expect much out of the summit!

The euro continued to spiral south trading at slightly off earlier lows at 1.3496 around 1.35 areas; the pair set the high of 1.3546 around opening areas of 1.3531 as the bearish sentiment continues to be the major driver for the pair. It also extended the losses versus the Japanese yen and sterling, trading around 122.27 and 0.9013 respectively.

Fears over extended budget shortfalls and rising debt burdens are not just haunting the euro, as the United Kingdom is days away from ending its fiscal year with a deficit-to-GDP ration flirting with that of Greece at 12.7%. The fears extended further for sterling ahead of the budget report this week where new estimates are to be provided alongside spending plans to aid the economy, and more importantly they are to further pin down the shaky political race between ruling Labour and Conservatives, extending the volatility further.

Sterling is trading with southern headwinds versus greenback, currently around 1.4985 around opening areas of 1.50 and off earlier lows of 1.4929. The trend over short term basis though remains bullish as far as 1.4850 is intact, and this week's heavy data might support sterling wear-off some of the heavy pessimism; yet we still set our focus on the budget report.

The Japanese yen on the other hand has been trading swiftly in the past period caught within the same range; from one side the risk aversion is providing the currency with strength, while of the other it is confronted by dollar strength and extended yen supply by the BoJ which both work for bullish headings for the pair. As U.S markets start their week, the movement is starting to be seen, and the USDJPY pair is at the time trending slightly lower, though still around opening levels at 90.51. So far the pair managed to set the high of 90.76 and low of 90.39.

Still, as mentioned above, the range has been tight for the three majors against the dollar if we compare their movement to that of Aussie and Kiwi versus the dollar. Both pacific currencies have extended their decline on the back of falling commodities and the fear over growth outlook, especially that their trading partners are indeed pacific based and such rein on growth by governments across the region in fear of inflation it will likely slow their recovery. Aussie versus the dollar is trading around 0.91 areas down by nearly 0.5% and kiwi versus greenback is also down almost 0.6% at 0.7019 areas.