he greenback had rallied sharply following the release of the minutes, which suggested the Fed could raise interest rates on as many as four occasions in 2018. This bounce proved shorted lived, with falling US bond yields and the release of a fairly optimistic set of meeting accounts from the European Central Bank (ECB) causing investors to consolidate gains.

The ECB’s meeting accounts from the bank’s January meeting continued to stress a cautious approach to monetary policy, saying that a change in policy stance would be premature. They did, however, voice increasing confidence that inflation would return to target and that growth could strengthen, with some members of the committee expressing a preference for a dropping in the easing bias. The minutes stated that ‘language pertaining to the monetary policy could be revisited early this year’, suggesting that the bank may soon be ready to indicate its large scale quantitative easing programme could be ended for good in September.

The latest Eurozone inflation numbers for January are not expected to be revised from their very lowly levels. In the absence of any surprises here, investors will look to speeches from Federal Reserve member’s Dudley and Mester in the US this afternoon.

UK economic growth rate is its slowest in five years

Sterling edged modestly higher against the US Dollar on Thursday, despite the release of a disappointing set of UK GDP figures. Data from ONS showed that the UK economy grew by just 0.4% in the final quarter of last year, down on the preliminary 0.5% estimate. Overall growth for 2017 was also revised downwards to 1.7% from 1.8%, its lowest level in five years. This leaves the UK lagging behind other major currencies, and could present a worry to investors as Britain prepares to leave the European Union.

Yet, with Bank of England members seemingly ready to overlook soft growth in favour of high inflation when deciding on the pace and timing of interest rate hikes, the Pound was little moved following its release. We see little reason to change our call for another BoE rate hike in May.

David Ramsden, one of the more dovish members currently sitting on the Bank of England’s monetary policy committee, will be speaking at midday today. An indication from Ramsden that he could soon be ready to vote for a hike would be a significant signal that higher rates are coming and could provide solid support for Sterling today.