Talking Points: Comments from BOC's Poloz Compound Canadian Dollar Selling Pressure Yen Sold on Waning Haven Demand as Nikkei Rallies Most in Three Weeks FOMC Minutes in Focus to Help Guide Future QE "Tapering" Dynamics The Canadian Dollar underperformed in overnight trade, falling as much as BOC Governor Poloz said he is not under pressure to raise interest rates in an interview with CBC. The move followed on from yesterday's dramatic Loonie selloff in the wake of a disappointing round of economic data. The trade deficit unexpectedly widened to the largest in three months. Meanwhile, the Ivey PMI gauge revealed business activity contracted for the first time since July in December. Economists were forecasting a pick-up ahead of the release. The Japanese Yen slumped as the Nikkei 225 stock index soared 1.94 percent, yielding the largest daily gain in three weeks and denting demand for the safe-haven currency. A relatively tame offering of second-tier economic data in European hours is likely to see traders looking ahead to the release of minutes from December's FOMC meeting later in the day. The fateful sit-down marked the beginning of the much-anticipated process of "tapering" the Federal Reserve's QE3 program, scaling down monthly asset purchases by a cumulative $10 billion . While the new Fed policy status quo is widely known at this point, traders will be keen to read the minutes nonetheless to try to decipher precisely what variables proved pivotal in pushing the rate-setting committee into action. This may establish a framework for interpreting US economic news flow, helping investors gauge the probability of acceleration or deceleration in the stimulus reduction process. On balance, a relatively hawkish tone stands to boost the US Dollar against policy-sensitive currencies, notably the Australian Dollar and the Yen. Needless to say, a softer lean that paints the decision to taper as having been particularly narrow may trigger the opposite dynamic. Asia Session : GMT CCY EVENT ACT EXP PREV 22:30 AUD AiG Performance of Construction Index (DEC) 50.8 - 55.2 0:01 GBP BRC Shop Price Index (YoY) (DEC) -0.8% - -0.3% 0:30 AUD Job Vacancies (NOV) -1.7% - 3.0% 5:30 AUD Foreign Reserves (A$) (DEC) A$59.5B - A$59.9B Euro Session: GMT CCY EVENT EXP/ACT PREV IMPACT 7:00 EUR German Trade Balance (E) (NOV) 18.1B (A) 17.9B Low 7:00 EUR German Current Account (E) (NOV) 21.6B (A) 18.8B Low 7:00 EUR German Exports s.a. (MoM) (NOV) 0.3% (A) 0.3% Low 7:00 EUR German Imports s.a. (MoM) (NOV) -1.1% (A) 3.0% Low 8:00 GBP Halifax House Prices s.a. (MoM) (DEC) -0.6% (A) 0.9% Low 8:00 GBP Halifax House Price ( 3M /Y) (DEC) 7.5% (A) 7.7% Medium 9:00 EUR Italian Unemployment Rate (NOV P) 12.7% (A) 12.5% Medium 10:00 EUR Euro-Zone Retail Sales (MoM) (NOV) 0.1% -0.2% Medium 10:00 EUR Euro-Zone Retail Sales (YoY) (NOV) 0.3% -0.1% Medium 10:00 EUR Euro-Zone Unemployment Rate (NOV) 12.1% 12.1% Medium 11:00 EUR German Factory Orders s.a. (MoM) (NOV) 1.5% -2.1% Medium 11:00 EUR German Factory Orders n.s.a. (YoY) (NOV) 6.1% 1.9% Medium Critical Levels: CCY SUPP 3 SUPP 2 SUPP 1 Pivot Point RES 1 RES 2 RES 3 EURUSD 1.3505 1.3564 1.359 1.3623 1.3649 1.3682 1.3741 GBPUSD 1.6275 1.6340 1.6371 1.6405 1.6436 1.6470 1.6535
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