Euro remains above $1.22

Markets were relatively quiet yesterday as the US was on a public holiday. The euro extended its gains against the dollar for a time, trading up to almost $1.23 before retracing a little lower. The single currency continues to trade in a narrow range of 88-89p against sterling

ECB member Hansson says ‘there are good reasons to reduce the importance of asset purchases (QE) in our communication soon…with a view to a potential end to these purchases’ in September

Bank of England MPC member Tenreyro says a couple more interest rate hikes will be needed if inflation is to be brought back into line with its 2% target

The FT is reporting this morning that the EU has ‘toughened its conditions’ for a transition deal for the UK, relating among others to the free movement of EU citizens to the UK during a transition period

Data due today includes CPI inflation in the UK, which the consensus expects to have ended 2017 at 3.0% (down slightly from 3.1% in November)

At home, the CSO publishes the Labour Force Survey for the third quarter of 2017