Currency markets weighing the prospects for recovery

The unexpected jump in US inflation data pushed the greenback higher against most currencies this week and may a harbinger of things to come – we continue to expect the dollar to appreciate this year. That said, recent US activity data, notably last week’s non-farm payrolls, have been mixed. As a result, the bigger picture is that the dollar has struggled to make much headway. The prospects for monetary policy normalisation remain key. Minutes from the April FOMC meeting, released on Wednesday, may provide some further clues as to policymakers’ intentions in that regard and may prove the highlight in a relatively quiet week for economic data.