Sterling is now the second weakest currency next to Japanese yen after the post BoE inflation report selloff. Markets are expecting BoE to start raising interest rate from the record low of 0.50% in late 2015. And the pace of tightening after that would be slow. Rate might reach 2% level by the end of 2017. And that's subject to the negative impact from stagnation in Eurozone. BoE governor Mark Carney noted that "developments in the world economy mean some of the downside risks to growth in earlier projections have crystallized." And, "a specter is now haunting Europe - the specter of economic stagnation."
GBP/USD took out recent support at 1.5789 to resume the larger decline from 1.7190. Focus in EUR/GBP is back on 0.7911 minor resistance while focus on GBP/JPY is back on 181.07 support. GBP/CAD's recovery from 1.7535 might have completed at 1.8287 already and bias is back to the downside for 1.7535 support. Overall, the consolidation pattern from 1.8666 is still in progress and would likely extend lower to 38.2% retracement of 1.5242 to 1.8666 at 1.7358 before completion.
In Eurozone, ECB president Mario Draghi said that the central bank would "further unconventional policy actions should medium-term inflation expectations worsen or if the measures already decided on prove to be insufficient". And, he emphasized that "both demand- and supply-side policies are necessary". Meanwhile, Bundesbank chief Jens Weidmann talked down the prospect of large-scale sovereign bonds purchases. He noted that "as well as the legal limits, the buying of state bonds would create wrong incentives, in particular encouraging indebtedness of euro zone countries."
On the data front, New Zealand Business NZ manufacturing index rose to 59.3 in October. Australian consumer inflation expectation rose 4.1% in November. Japan machine orders rose 2.9% mom in September. UK RICS house price balance dropped to 20 in October. A bunch of China data would be released today which might trigger volatility in Aussie and Kiwi. From Europe, ECB will release monthly bulletin. German will release CPI final and Swiss will release PPI. Later in the day, Canada will release new housing price index while US will release jobless claims.