Dollar stays firm with support from expectation on December rate hike. Chicago Fed president Charles Evans said that the appropriate policy would have three interest rate hikes "between now and the end of next year", that is, end of 2017. He noted that the economy is doing "quite well" and labor market was "quite strong". And currently, the most important thing if for Fed to be more explicit on the conditions of further rate moves. To him, he'd prefer to see further decline in unemployment rate and improvement in inflation outlook. As of yesterday, fed fund futures are pricing in only 9.3% chance of November hike but 74.2% chance of December hike.
BoC governor Stephen Poloz said that the "best plan" right now is to "wait for the next 18 months or so". Markets initially took that as referring to monetary policy, hinting that the central bank will stand pat for the time frame, and Canadian dollar rebounded. But then, Poloz clarified that "the need to wait 18 months was in reference to the time frame over which the output gap is expected to close, as noted in the Bank's October Monetary Policy Report." And, "it was not intended as a reference to the Bank's monetary policy." Loonie was back under some mild pressure after the clarification.
SNB chairman Thomas Jordan said that the central bank hasn't reached the "lower bound" of interest rate yet. He noted that ", the cost associated with the current negative interest rate is clearly lower than the cost of holding cash". And, "demand for cash has not yet risen substantially". He described the current negative interest rate policy as "indispensable" because of "the overvaluation of the Swiss franc and the globally low level of interest rates."
On the data front, German Ifo will be the main focus in European session. US will release house price index and consumer confidence later in the day.