If the US yield curve is steepening on the back of a brighter economic outlook than there is no need for the Fed to add to its purchases of Treasury notes. Higher rates will be needed when economic growth turns positive, Lacker says.

Yields will be in focus this afternoon as the government auctions 10-year notes. An hour later, the Beige book will be released, laying the groundwork for the next FOMC meeting.

EUR/USD is consolidating losses, now at 1.3990. 1.4000 and 1.4050 are resistance levels intraday.