The greenback is up against the euro and down against the pound as it looks to the Federal Reserve for long-term direction.

EUR/USD steady on Euro-zone inflation figures

The dollar kicked off this week on a high note after the long weekend, and it has made incremental gains throughout the week despite moments of weakness against the euro and the pound.

EUR/USD is bouncing over and under the 1.23 mark this morning after spiking above 1.235 midday yesterday.

With Euro-zone inflation figures coming in as expected at 1.3% YoY and core CPI up 1% as expected, there is little on the economic front causing the fluctuation of the pair.

The dollar is looking for direction from the Fed as investors debate whether there will be three or four rate hikes this year, with the consensus leaning to the higher side. The Fed’s semi-annual monetary policy report out later this morning, as well as more Fed member speeches, might send the dollar in a more concrete direction today.

Pound rises on Brexit optimism

The GBP/USD pair is pushing up against the 1.40 mark on positive traction for a Brexit deal with the U.K. having a closer relationship with the European Union.

Theresa May met with members of her divided cabinet Thursday at Chequers in order to come to a consensus. Downing Street announced that May would unveil their vision during a speech next Friday.

With little on the economic front next week for the U.K., we’ll likely see Brexit talks continuing to sway the pair.

CPI data lifts Canadian dollar

USD/CAD dropped to 1.262 on better-than-expected Canadian consumer price index data out Friday morning.

Inflation figures showed the CPI increasing 1.7% YoY, beating estimates of 1.4%. For the month of January, CPI rose 0.7% compared to a 0.4% decline in December.

The unexpected gains for the Canadian dollar against the U.S. dollar come after five consecutive days of advances for the USD/CAD pair. Thursday, the pair hit a year-to-date high around 1.275.