Dollar firmer again

The dollar is firmer against the other main currencies again this morning, continuing its relatively good run of late. It has strengthened to almost $1.23 against the euro and to under $1.40 against sterling, while it is back trading at close to Y108 against the yen. Meanwhile, sterling has gained some further ground against the euro to trade at circa 88p

Bond yields in the UK and Germany were unchanged to lower yesterday, but continued to nudge up in US. Rising yields in the US relative to elsewhere have probably been providing some support  to the dollar lately

The Fed publishes the minutes of its recent policy meeting later today. The statement released after that meeting said further gradual increases in interest rates are likely, and the minutes may point to the likelihood of another 25bps hike at the next meeting in March (which would be the 6th such increase in the current cycle)

Today also sees the release of ‘flash’ PMIs for the Euro area economy. The composite PMI is running at a high level, consistent with strong economic growth in the zone, with the consensus expecting a reading of 58.4 for this month

Labour market data are published in the UK as well. According to the consensus, the unemployment rate is expected to have averaged 4.3% in the final quarter of 2017, the same as in Q3, with annual earnings growth expected to have ticked up to 2.5% from 2.3% between the two periods