Fed minutes eliminate hawkish noises

• Fears over lack of inflation hit rate expectations

• Chinese trade data shows large fall in export and imports

• Dot chart could be "misrepresentative" of FOMC members view

• USD weakness expected to continue through the week at least

Last night's Federal Reserve minutes focused heavily on the dovish side of recent monetary policy arguments, weakening the USD further as a result. Yellen's 6 months comment always felt like a slight mis-step and the lack of conversation around it or the 'considerable period' that bridges the end of tapering and the beginning of rate rises means we must eliminate thoughts of near-term hawkishness from the FOMC.

When Janet Yellen is occupying the hawkish side of the argument, then you know that the doves are in the majority. The key takeaway line is that several participants noted that the increase in median projection overstated the shift in rates and this has hit the USD hard. This goes against a lot of the data we received after the Fed meeting, in particular that of the dot chart. The dots represent each member’s vote on where they think rates should be at those given time frames, however we were told yesterday that this may be misrepresentative. Misrepresentative representation is a new one for me and a strange and confusing policy communications mess.

With the elimination of near-term hawkishness from the Federal Reserve, the market will also be pricing out near-term USD strength, with EURUSD and GBPUSD eyeing up important resistance levels of 1.40 and 1.70 in particular. The dollar's saviour will be increased inflation and price pressures although given price dynamics in developed markets at the moment, we won't hold our breath. The majority of the FOMC hinted that inflation would only come back to target very slowly through the coming years with some - much like Fed Committee member Kocherlakota did the day previous - hinting that further stimulus may be needed.

Some of the dollar bleeding has been stymied by poor trade data from China but this is more of a pause in losses than a new bout of greenback gains. Both imports and exports fell in China through March. Imports fell 11.3% compared to a year earlier, while exports slipped by 6.6% over the time period. Many people are putting this drop down to "over-invoicing" last year - a not exactly legal way of inflating invoices so as to increase the amount of foreign currency being brought into the country. Trade figures have been poor this year so far and China watchers will hope that, much like the weather effect in the US, a clearer picture of Chinese trade is found soon.

Export data from both Germany and the UK disappointed yesterday. German exports fell by 1.3% and UK exports by 1.6% respectively, suggesting that growth in the former will disappoint in Q1 while the rebalancing of the latter remains far from desired.

AUD has crept to the highest level since mid-November overnight following an unexpectedly strong jobs report. AUD has enjoyed a strong 2 weeks or so following a speech from RBA Governor Glenn Stevens that the early signs of a transitioning of the Australian economy from one built on mining to one that revolves around consumer spending are being seen. Low volatility facilitating a rise in carry trades and a quest for higher yield has also helped AUD and NZD higher. Last night's jobs numbers saw the jobless rate slip to 5.8% from 6.1% in March - the largest fall in unemployment since August 2010.

Today's Bank of England meeting will be an exercise in futility. The 12.00 announcement will not see any policy changes. Elsewhere, we have initial jobless claims at 13.30 and the news on the Greek bond issuance later this morning.

Have a great day.