GBP
The pound weakened as details of the Bank of England’s first unanimous decision
on monetary policy since July dampened the outlook for higher interest
rates that would support the currency. Sterling fell against 13 of its 16 major
peers after policy makers Martin Weale and Ian McCafferty dropped their call
for an interest-rate increase as plunging oil prices raised the risk that slow
inflation would become entrenched. If interest rates are raised now it would

GBP
The pound weakened as details of the Bank of England’s first unanimous decision
on monetary policy since July dampened the outlook for higher interest
rates that would support the currency. Sterling fell against 13 of its 16 major
peers after policy makers Martin Weale and Ian McCafferty dropped their call
for an interest-rate increase as plunging oil prices raised the risk that slow
inflation would become entrenched. If interest rates are raised now it would
add to deflationary pressures as people would have less money to spend on good
and services.

Separate data showed wage growth in the three months through November was less
than analysts estimated. However, with wage growth at 1.7% year on year and
inflation at 0.5% year on year, in real terms the general public is better off
and has more disposable income. The Monetary Policy Committee also
forecast that U.K. inflation will drop to zero in the first quarter and there’s
a roughly equal chance that it could fall lower.

The U.K. unemployment rate also declined to a six-year low of 5.8 percent
from 6 percent. Analysts had forecast a drop to 5.9%.

EUR
Yesterday two euro-area central-bank officials said ECB president Mario Draghi
and his Executive Board are proposing to spend 50 billion euros a month through
December 2016. Immediately on the back of this the Euro did strengthen, but
lost its gains as the afternoon went on. Some Analysts al yesterday
stated that Draghi should be ambitious with his plans for QE and said there
should not  be a cap on the amount of money pumped into the Eurozone.

CAD
Yesterday  Canada  were cut down interest rated to 0.75% from 1%
which had been in place since September 2010. The main factors behind it are
geared towards balancing out the effects of cheaper oil prices  and
inflation, along with minimising the impact of a potential downturn within the
housing market. Canada also cut it’s growth and inflation forecasts for the
year.

Key
Announcements:
EUR – 12:45 – ECB interest rate decision expected to remain unchanged
EUR – 13:30 – ECB Monetary Policy Statement and Press Conference
USD – 13:30 – Initial Jobless Claims expected to fall to 300K from 316K
USD – 13:30 – Continuing Jobless Claims expected to fall to 2.41M from 2.42M

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