*Good morning/afternoon everyone!*

Right out of the gate, the best performing currency this morning is sterling, which traded higher against all of the major currencies. It is struggling to extend higher at the start of the NY session but with UK yields up 7bp this morning, a further rally is likely. The greenback is holding bid as well, but the move is being overshadowed by the strength of GBP and stability of EUR. As this morning’s UK and Eurozone economic reports were slightly weaker, the strength of both currencies is purely a function of the market’s renewed interest in European assets. The commodity currencies are mostly lower with the exception of NZD which continues to be driven higher by short covering. German CPI is due for release at 13 GMT followed by US GDP revisions and later the Beige Book report. While all of these numbers could have a meaningful impact on EUR and USD, the thunder could be stolen at any moment by headlines in Washington. We believe that the prospect of tax reform will keep the USD bid and we are also looking for a positive outlook in the Beige Book. Dudley, Yellen and Williams speak today and they are likely to remind us that another rate hike may be necessary.

*The MAIN THEMES I see today are*

+USD
+EUR
+GBP
-AUD
-JPY

*Trading Biases*

+USD, +EUR, +GBP
-AUD, -JPY
mildly +CAD
neutral CHF, NZD

*Today’s Initial Trades*

1. Bought GBPJPY at market now 149.58, Stop at 149.30, Target 149.86
2. Sell AUDUSD at market now .7578, Stop at .7606, Target .7550
3. Buy CADJPY at 86.98, Stop at 86.70, Target 87.26
4. Buy EURUSD at 1.1844, Stop at 1.1816, Target 1.1872

Close ALL open day trades by 10:20AM NY / 15:20 GMT