Sterling remains under some pressure after yesterday's production data that raised some concerns over the momentum of UK economy. The British Chambers of Commerce also lowered growth forecast for the three years from 2015 to 2017. BCC projected 2015 growth to be 2.4%, revised down from prior forecast of 2.6%. Growth is projected to be 2.5% in 2016 and 2017, revised down from prior estimate of 2.7%. BCC noted that growth was impacted by "persistently weak trade performance and current account balance". And, BCC warned that "premature interest-rate increases" are "unnecessary and too risky" as recovery is still fragile with global uncertainties. And suggested BoE to delay rate hike even further than Q3 next year.
Commodity currencies remain the weakest ones, led by Canadian dollar. WTI crude oil seems to be taking a breath after breaching 37 handle. Nonetheless, down trend remains intact and that would continue to weigh on Loonie. BoC governor Stephen Poloz remained confident that "there's a reasonable probability that two years from now we'll be back at 2 percent inflation, the economy operating at full capacity.” He also noted that the weakness in the economy during the first half of this year was just a "mild contraction" and there are other sources of growth continuing to gather momentum. And, the economy is "quite far" from needing unconventional monetary policies.
Release in Asian session, Australia Westpac consumer confidence dropped -0.8% in December, home loans dropped -05% in October. Japan machine orders rose 10.7% mom in October. China CPI rose to 1.5% yoy in November while PPI was unchanged at -5.9% yoy. Looking ahead, Swiss will release unemployment rate while Germany will release trade balance today. US will release wholesale inventories.