The Fed minutes for December showed that most members supported the rate hike but some were more dovish expressing concerns about low inflation and the degree of the slack in the labour market. Fed`s Lacker, stated that the FED will likely require 4 hikes in 2016. Todays US calendar is relatively light and we expect the dollar to be squeezed lower before tomorrows unemployment claims.
The Pound continues to be punished across the board as worse than expect Manufacturing Production m/m (-0.4% vs 0.1%) and Industrial Production m/m (-0.7% vs 0.0%) showed that the UK economy is far from recovering and pouring concrete on the now later than expected interest rate hikes. All will however be made clearer in tomorrows BOE meeting, where members are to vote on any changes to the Official bank rate and asset purchase facility.
Asian equity markets traded higher with sentiment supported by the better than expect Chinese Trade balance and the Nikkei finished up 2.9%. JPN Core Machine Orders m/m and PPI y/y are expected later today (-7.3% and -.04% respectively) with any upside surprises expect to bode well for the JPY across the board.