The euro is on the front foot against both the dollar and sterling, trading at about $1.1550 and 90.5p respectively this morning. The single currency seems to have been helped by the better tone in equity markets lately, with stocks advancing pretty much across the board. The rise in core bonds yields has stalled for now though, with US and German 10-year yields edging down a little yesterday.
The Fed has adopted a more cautious stance on any further US interest rate increases, which is also probably weighing on the dollar a little. The minutes of its December meeting published yesterday evening noted that, given recent volatility in financial markets and the increased concerns about global growth, it could “afford to be patient about further policy firming” (rate hikes) particularly with inflation in the US remaining relatively well behaved
Theresa May’s government lost another vote in parliament yesterday, this time on an amendment which means that, if it loses next week’s vote on the Brexit deal, then very shortly thereafter she will have to set our what the government’s next steps are
Industrial production in France , like in Germany, fell in November (from October) and was also running below its level in the same month in 2017, which will weigh on overall GDP growth in the final quarter of 2018
Data due today includes jobless claims in the US while the Fed’s Powell speaks on the economy and monetary policy