hursday’s ECB March meeting accounts were pretty dovish, with policymakers claiming that monetary support would still be necessary, even after the end of its quantitative easing programme. The minutes continued to fret over the recent appreciation of the Euro, echoing comments made by President Draghi during last month’s press conference. While currency strength had yet to impact demand according to the minutes, it warned that the value of the common currency may have a negative impact on inflation. ECB member Coeure struck a similar tone during his speech yesterday, stating that the bank may continue to support the Eurozone economy, even with tighter policy.

This morning’s German inflation data could give us a decent indication as to the strength of the Euro-wide numbers for March, set to be released next week. Trade balance data this morning is unlikely to rock the boat.

Sterling had a contrastingly impressive day, surging towards the 1.43 mark against the US Dollar this morning, its highest level since January, and notching one of its best daily performances against the Euro so far this year. With no major economic data out of the UK yesterday, investors continued to focus on the growing likelihood that the Bank of England would raise interest rates next month. Brexit Minister David Davis also spoke yesterday, calming the market by claiming that ‘virtually nothing will change for business during transition period after Brexit’.

US Dollar recovers on easing geopolitical tensions

The US Dollar ended its losing streak against its major peers, with the ECB minutes and an improvement in risk appetite lifting the Dollar index off its two week low. The improvement in risk appetite followed comments from President Trump on Twitter that dialled back on warnings of imminent military action in Syria. Trump’s comments on the matter have been convoluted which will keep markets on edge going into the weekend. Higher treasury yields also provided decent support for the greenback. The US 10-year yields surged by around 5 basis points overnight, rising to its highest level since late-March.

A couple of speeches from Federal Reserve members Rosengren and Bullard will round off the week today. Other than that, a fairly quiet day in terms of economic data with all eyes on Donald Trump for further comments regarding the possibility of military action in Syria.