Despite the fact that yesterday's FOMC minutes from the March 21st Fed meeting highlighted inflation as the "predominant policy concern"the dollar traded relatively sideways after the release and is down this morning. U.S. 10-year yields, however, jumped up on the release of the report, but eased overnight as global markets appear to have digested the Fed minutes as a relatively neutral piece of market information. Since both growth and inflationary risks exist in the forecast, the Fed painted itself as treading water and in full data-dependent mode. This is a far cry from the vigilance of the ECB, which kept its main policy rate unchanged this morning at 3.75 percent but is not likely done with rate tightening. EUR is a bit higher this morning despite on-target final fourth quarter GDP and weak Italian industrial production data.

This morning, U.S. import price data will be released and is expected to show a month-over-month increase of 0.8 percent and a year-over-year increase of 2.3 percent. A rise in commodity (and - most specifically - energy prices) in March is likely to engender the inflationary pressures. If inflationary pressures are strong, it could boost USD. Tomorrow PPI data could have a similar impact, as they are also expected to have risen in March.

Also out this morning will be a South African rate decision. At 9:00 am Eastern Time, the South African Reserve Bank is expected to announce its main policy rate, which is currently at 9.00 percent. There are mixed sentiments in the market as to whether there will be a 50 basis point hike or the bank will keep rates unchanged. A hike would bolster ZAR.