The US Dollar is on strong footing again this morning as lingering political risks in Europe and disappointing data out of the UK have kept the greenback in a favorable light among market participants.

Both 2-year and 10-year Italian-German and French-German yield spreads continue to widen out to the Euro's detriment, highlighting the market's perception that the upcoming slate of elections won't be a walk in the park. Similarly, with the triggering of Article 50 now mere weeks away, the revision lower in the UK's Q4'16 GDP figure has tripped up the British Pound once more.

Yet amid a quiet calendar on the US Dollar's side of the equation, the January 31 to February 1 FOMC meeting minutes stand alone as the significant catalyst for the greenback today. The minutes should reveal a growing yet cautiously hawkish tone among policymakers, in particular thanks to the fact that evidence has started to build up that not only is the economy at "full employment," but that realized and expected inflation pressures are starting to build.

Recall in the policy statement that officials were confident that inflation would rise back to their medium-term target of +2%; since then, we've seen that belief materialize, with the January US CPI report showing both headline and core inflation eclipsing said level. In turn, this may be interpreted by traders as the FOMC having laid out a condition at the beginning of the month to raise rates sooner than previously anticipated, with said condition having been met in the interim period.

Any reaction from the FOMC minutes should be looked at exclusively through the lens of interest rate differentials: if Treasury yields increase post-minutes, the US Dollar should well via EUR/USD; otherwise, given the Japanese Yen's strength today, a drop in US yields could further sink USD/JPY.