The dollar hit a three-month high against the euro today as dealers digested comments from Federal Reserve chairman Alan Greenspan that the US' current account deficit should stabilise, and the conclusion of the Group of Seven (G7) finance meeting in London.
In late European trading, the euro fell to $1.2738 - the lowest level since November 3 - from $1.2866 late on Friday in New York.
Market pressures 'appear poised to stabilise and over the longer run possibly to decrease the US current account deficit and its attendant financing requirements,' Fed Reserve chairman Alan Greenspan said at a conference in London on Friday.
Meanwhile, G7 finance ministers and central bankers from Britain, Canada, France, Germany, Italy, Japan and the US argued at the weekend that 'more flexibility in exchange rates is desirable for major countries or economic areas that lack such flexibility'.
Investors were also encouraged today by US President George W Bush's announcement of the federal budget for 2006, showing a large reduction in the vast US budget deficit.
