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01:45 China HSBC Manufacturing PMI (Preliminary) November 50.9 50.9 50.4
03:30 Japan BoJ Interest Rate Decision 0.10% 0.10% 0.10%
03:30 Japan Bank of Japan Monetary Base Target 270 270 270
03:30 Japan BoJ Monetary Policy Statement
The yen was the biggest loser after the won among the greenback’s major peers after the Bank of Japan left policy unchanged as it maintains efforts to spur 2 percent inflation, while Federal Reserve meeting minutes signaled a reduction in monetary easing “in coming months.” Japan’s central bank kept its pledge to expand the monetary base by as much as 70 trillion yen ($697 billion) a year at today’s meeting, in line with economist forecasts in a Bloomberg News poll. Nineteen of those surveyed said the BOJ will add stimulus in the second quarter of next year after a planned increase in the nation’s sales tax, with seven saying it will ease in the July-September period.
In the U.S., minutes of the Fed’s Oct. 29-30 meeting released yesterday showed policy makers “generally expected” improvement in employment data that would “warrant trimming the pace of purchases in coming months.” The U.S. central bank buys $85 billion of Treasuries and mortgage-backed securities a month.
The euro declined as investors weigh the possibility of stimulus from the European Central Bank before President Mario Draghi speaks. Two people with knowledge of the debate said the ECB is considering a negative deposit rate. Policy makers would reduce the rate for commercial lenders who park excess cash at the central bank to minus 0.1 percent from zero, said the people who asked not to be identified because the talks aren’t public.
Australia’s dollar fell after a Chinese manufacturing gauge dropped. In China, the preliminary 50.4 reading in November for a Purchasing Managers’ Index released today by HSBC Holdings Plc and Markit Economics compared with a 50.8 median estimate from analysts. The final number for October was 50.9, and levels above 50 indicate expansion.
EUR / USD: during the Asian session the pair fell to $ 1.3415
GBP / USD: during the Asian session the pair fell to $ 1.6070
USD / JPY: during the Asian session, the pair rose to Y100.50
The UK calendar sees a slew of data at 0930GMT, with the release of the Oct BOE Capital Issuance data, the Oct public finances and the October SMMT Auto Production Figures. UK, at 1100GMT, the Nov CBI Industrial Trends Survey data will be published. The data provide an early indication of how the factory sector performed ahead of the more market-moving manufacturing PMI which is due on December 2. Analysts are looking for a reading of +1, up from -4 in Oct.
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