Dollar stays firm against other major currencies even though FOMC minutes indicated that Fed won't be ready to raise rate soon. In particular, the minutes noted that "most participants thought the reference to patience indicated that the Committee was unlikely to begin the normalization process for at least the next couple of meetings." Nonetheless, the minutes echoed Fed chair Janet Yellen's comment and noted that "the Committee might begin normalization at a time when core inflation was near current levels." Though, even in that case, policymakers "would want to be reasonably confident that inflation will move back toward 2 per cent over time." US equities recovered overnight with DJIA up 212.88 pts, or 1.23% to close at 17584.52. S&P 500 closed up 23.29 pts, or 1.16% at 2025.90. Asian stocks also recovered with Nikkei back above 17000 handle for the moment.
Australian dollar is mildly higher today after better than expected housing data. Building approvals rose 7.5% mom in November versus expectation of -3.0% fall. That followed 11.5% mom rise back in October. But overall, the Aussie is soft in tight range as weighed down by speculations that RBA could cut rates again this year, up to two further cuts. However, there were also counter arguments that RBA didn't sound any more dovish in December statement. The central bank just mantained that "the most prudent course was likely to be a period of stability in interest rates."
Looking ahead, BoE policy decisions will be the focus today. But the central bank is expected to keep rates unchanged at 0.50% and hold the asset purchast target at GBP 375b. Only a brief statment is expected and thus the announcement could be a non-event. Elsewehere, Eurozone will release PPI, retail sales and confidence indicators. US will release challenger job cuts and jobless claims. Canada will release new housing price index.