Euro strengthens after ECB minutes

The euro has strengthened following yesterday’s release of the minutes of the ECB’s December meeting. It is back trading close to its recent highs of just under $1.21 against the dollar, and at 89p against sterling.

German coalition talks between the CDU and SPD are making some progress, according to reports this morning, which is also helping to support the euro

German bond yields rose after the ECB minutes, with 10-year yields ending the day about 5bps higher at 0.58%

The minutes noted that the ECB is becoming increasingly more confident that inflation will return to its target on a sustained basis, which in turn may prompt it to end its asset purchases in September as planned

Fed member Dudley says the outlook is for above-trend growth in the US, ‘driven by accommodative monetary policy and financial conditions as well as an increasingly expansionary fiscal policy,”

Data due today includes CPI and retail sales in the US