Dollar stays soft as the markets perceived the tone of the FOMC minutes released overnight pointed to risk of further delay in rate hike. In particular, the minutes noted that "participants anticipated that the recent global developments would likely put further downward pressure on inflation in the near term." And, "compared with their previous forecasts, more now saw the risks to inflation as tilted to the downside." Though, some policy makers remained optimistic that "eliminating slack along such broader dimensions might require a temporary decline in the unemployment rate below its longer-run normal level, and that this development could speed the return of inflation to 2 percent."
In UK, BoE governor Mark Carney said that "the exact timing of the Fed move is not decisive for the timing of the move by the Bank of England." And he emphasized that "we will take our responsibilities. We will determine the timing for the start of the process of monetary policy normalization." He noted that both BoE and Fed shared same economic outlook that is "consistent with the prospect, not the certainty, but the prospect of limited and gradual increases in interest rates over time." BOE voted 8-1 to keep the Bank rate unchanged at 0.5% and decided unanimously to leave the asset purchase program at 375B pound. Ian McCafferty remained the only member favoring a rate hike of +25 bps is warranted. More in BOE Kept Bank Rate Unchanged, Forecast Inflation to Pick Up More Gradually.
Canadian employment data is the main focus today and is expected to show 10k growth in September. Unemployment rate is expected to drop to 6.9%. The loonie is supported by recent rebound in crude oil which breached 50 to 50.7 yesterday. Elsewhere, Australia home loans rose 2.9% in August. UK trade balance, US import price and wholesale inventories will also be released.