Our predictions of a stronger dollar yesterday materialised as data and commodity markets combined to help the greenback. The move against euro and sterling was not a drastic one but continuous throughout the course of the day reflecting the precipitous fall we saw on oil markets and the strong but not unexpected data releases. As such dollar is set for its largest weekly gain against the single currency in 2 years and hit 4 week highs against sterling. ECB members tried to dampen expectations of further rate rises in the near term. Members were quoted as saying that their anti-inflationary stance may have been ‘overstated’. Sterling however was unable to take advantage of the softening. 

Today has already seen German CPI come out up 0.6% versus a consensus view of 0.5% however the US figure (due 13.30) will be more closely watched; markets are looking for 0.5% jump higher.