The US dollar is continuing its gains from late last week as the currency corrects from its recent lows.  The main culprit behind the rally is not so much renewed interest or fundamental strength, but weakness in all other products which has led to a â�,��"flight to qualityâ�,� so to speak.  The markets are likely to continue its pattern of consolidation or position squaring as we approach the Memorial Day weekend. 

Inflation fears have really taken hold of the market and as a result, personal consumption expenditures for 1Q06 will be closely watched when it is released later on this week. 

Nothing of real note in the option volatilities market today.  As the holiday weekend approaches, vols are likely to sell off even further. Skews remain unchanged from last week.

OPTION TRADE IDEAS

Below please find some strategies, which depending on your view might be applicable. Please bear in mind that all of these trades can be applied to any of the currency pairs, which may be traded. All barrier levels, strikes, triggers, payouts, and maturity dates can be tailored to each individualâ�,��"�s views.

Kathy Lien is the Chief Currency Strategist at FXCM.

Disclaimer: Transactions in options carry a high degree of risk. Purchasers and sellers of options should familiarize themselves with the type of option (i.e., put or call) which they contemplate trading and the associated risks. You should calculate the extent to which the value of the options must increase for your position to become profitable, taking into account the premium and all transaction costs.