On a broader scale, the dollar has done well as a growth proxy during the current recovery and that is likely due in large part to the difference in investor perceptions of central bank policies. Despite a more gradual pace than anticipated, the Fed is nevertheless moving towards policy normalization and that should continue to support the dollar, even in a risk-seeking environment. But it is not purely a one-way trade either for or against the dollar this year as we move further away from the height of the crisis and the correlations show investors will remain more discretionary in their currency selections than they were last year.

Following the Eurozone/IMF decision to support Greece, risk sentiment has firmed somewhat though equity gains were relatively modest, with the notable exception of China. While policy differentials are likely to remain the main driver of currencies in the near-term, we thought it would be useful to revisit currency correlations with oil and the S&P 500, to see if any correlations have shifted in order to position better for any further possible firming in sentiment.

Governing Council member Nowotny said that the ECB is currently debating exit strategies. In respect to Greece, he does not see any problem with the EU deal or the involvement of the IMF. In addition he highlighted that the EU deal on Greece is regarded to be positive.

Bank of Canada Senior Deputy Governor Jenkins, whose term ends in April, said the Canadian dollar is affected by many factors and that the country's exporters have had to adjust to a stronger currency. But he did not deviate from the BoC's official stance and said that the bank's focus remains on the inflation target, not a target for the currency.