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• ECB, BoE and SNB Headline Packed Session;
• Traders Seeking Insight on Post-QE Policy From Draghi;
• No Shortage of Data Despite Central Bank Dominance.

ECB, BoE and SNB Headline Packed Session

We have a jam packed session in store on Thursday as we get monetary policy decisions from three major central banks, as well as a host of important economic releases from across Europe and the US.

The European Central Bank, Bank of England and Swiss National Bank will all conclude their meetings today, with none of them seen following their US counterparts and squeezing in one more change before year-end. Of the three, the ECB announcement will probably be of most interest as the central bank is now actively trimming its stimulus program and President Mario Draghi will deliver the latest macro-economic projections.

Traders Seeking Insight on Post-QE Policy From Draghi

With the ECB having only announced a taper to its quantitative easing program at the last meeting, it’s extremely unlikely that further updates will come today and I doubt Draghi will make any promises regarding the end of bond buying from September. That said, with the economic recovery gathering momentum, Draghi is likely to be pushed on this and may offer small clues on the next steps, for example the timing of the first rate hike and how the central bank will approach raising rates and reducing its balance sheet. I don’t think we should expect too much though as Draghi detests being perceived to have committed to anything.

The BoE announcement should be a quieter affair, with the central bank not following up its meeting with a press conference. We will get minutes from the meeting as well as voting information, however with the central bank having only raised interest rates for the first time since the financial crisis last month, I doubt there’ll be much in these that will cause much of a stir. I still question whether the rate hike was inflation related or a move to get the rate back to what the BoE previously considered to be the lower bound, something that may become clearer as we see how much appetite there is for more rate hikes over the next year.

No Shortage of Data Despite Central Bank Dominance

There is a lot of economic data scattered around these central bank events, with euro area, German and French manufacturing and services PMIs being released throughout the morning. These will be accompanied by retail sales data for the UK – an important indicator of economic health, particularly at this time of the year, at a time when the consumer is feeling the squeeze. This afternoon we’ll get both retail sales data and services PMIs from the US and hear from Bank of Canada Governor Stephen Poloz. Needless to say, it’s likely to be quite a volatile session on Thursday and that’s without even mentioning Bitcoin which has settled down since the CBOE futures launch.

The Federal Reserve, as expected, raised its benchmark interest rate by a quarter of a percentage point, to a range of 1.25% to 1.5%. The latest hike continues the Fed’s gradual move toward higher rates, which were cut to virtually zero during the financial crisis. The latest hike is the 3rd time this year that the Fed has raised rates, reflecting its confidence that the economy is robust and growing. In the statement that followed the decision, the Fed suggested that the upcoming tax cuts would only modestly increase growth with little to no impact on inflation. Therefore, the Fed looks to be adhering to the plan of 3 rate hikes in 2018. Fed Chair Janet Yellen commented, “We continue to think that a gradual path of rate increases remains appropriate even with almost all participants factoring in their assessment of the tax policy”.

Prior to the rate hike, the US Bureau of Labor Statistics released CPI for November. The Consumer Price Index rose 0.4% in November compared to October, in line with market expectations. But 75% of the November increase was due to rising energy prices, which rose 3.9%, as the price of gasoline at the pump surged 7.3% compared to the previous month. Annualized CPI rose 2.2%, above the Fed’s 2% inflation target. Outgoing Fed Chair Yellen has admitted that the Fed’s understanding of the forces driving inflation is “not perfect”.

The US Energy Information Administration released its latest data for Crude Oil Stocks change for the week ended December 8th. US crude oil stockpiles fell by 5.1 million barrels, the 4th consecutive week of declines, to 442.99 million barrels, the lowest in just over 2 years. Oil prices fell on news of the drawdown as it was countered by a larger-than-expected rise in gasoline inventories, and US crude output continued to grow to a record high of 9.78M bpd.

Today will see 2 more Central Bank meetings: The Swiss National Bank and the Bank of England.

EURUSD is little changed in early Thursday trading at around 1.1832.

USDJPY is close to the session lows of 112.527, currently trading around 112.62.

GBPUSD is 0.15% higher in early session trading at around 1.3440.

Gold is 0.25% higher, trading around $1,258.50.

WTI is unchanged overnight, trading around $56.66.

Major data releases for today:

At 08:30 GMT: the Swiss National Bank (SNB) will announce its interest rate decision and hold a press conference. Rates are expected to remain at 0.75% but the markets will be keen to hear any updates to monetary policy as we close 2017 and enter 2018. There is a possibility that we may see CHF volatility following the release.

At 9:00 GMT: Markit Economics will release Eurozone PMI data for December. PMI Composite is forecast to come in lower at 57.2 from the previous release of 57.5. Services PMI is forecast at 56.0 from 56.2 and Manufacturing PMI is forecast at 59.6 from 60.1. Any significant deviation from forecasts will see EUR volatility.

At 09:30 GMT: UK National Statistics will release Retail Sales data for November. Month-on-month Retail Sales are forecast to come in at 0.4% from the previous release of 0.3%, Annualized Retail Sales are forecast at 0.3% from the previous reading of -0.3%. Retail Sales Ex-Fuel month-on-month is forecast at 0.5% from 0.1% and the annualized rate is forecast to come in at 0.5% from the previous release of -0.3%. If the actual is significantly different from forecast we will see GBP volatility.

At 12:00 GMT: The Bank of England will announce its interest rate decision. The markets expect the BoE to leave rates unchanged at 0.5% but will be interested in the Monetary Policy Summary that follows the announcement for clues as to future monetary policy – along with the minutes from the previous MPC vote.

At 13:30 GMT: the US Census Bureau will release Retail Sales for November. The focus will be on the month-on-month release that is forecast at 0.3%, slightly higher than October’s 0.2%. We can expect USD volatility if the actual release is significantly different from the forecast.

At 13:30 GMT: the European Central Bank (ECB) is expected to release its Monetary Policy statement and hold a press conference. Whilst interest rates in the Eurozone are unlikely to change for some time, the markets will be keen to learn any changes to the scaling back of QE and economic forecasts for the EU. The markets could experience heightened volatility in EUR during the press conference.

At 17:25 GMT: Bank of Canada Governor Poloz is scheduled to speak before the Canadian Club Toronto on the topic: “Issues keeping the Governor awake at night”. The markets could see CAD volatility during the speech and the Q&A session.

Headlines/Economic Data

General Trend: Asian equities trade mixed following tightening measures out of the US Fed and PBoC

Chip-related companies trade generally higher: Taiwan Semi +1%, Samsung Electronics +1.5%

A$ and Australian bond yields rise on better than expected employment data

Heavy data session for China

European rate decisions coming up

China and HK Airline names higher on oil prices

Japan

Nikkei 225 opened -0.3%, closes -0.3%

Mega banks track earlier weakness in US financials: Mitsubishi UFJ -2%, Mizuho Financial -1.7%, Sumitomo Mitsui -1.5%

Telecom names decline as Rakuten confirms plans to enter mobile network business; Rakuten -3%, KDDI -1.8%, Docomo -1%, Softbank -2.8%

JAPAN DEC PRELIM PMI MANUFACTURING: 54.2 V 53.6 PRIOR

Japan govt may project ¥1T tax revenue boost in FY18 - Nikkei

Japan MoF sells ¥1.0T v ¥1.0T indicated in 0.6% in 20-yr JGBs; avg yield 0.573%; bid to cover 4.56x

(JP) Nikkei poll of business leaders shows that majority of respondents said they will or are likely to spend more on personnel in FY18

Japan Govt will revise up its FY18 real GDP growth forecast to 1.8% (prior 1.4%) due to recovery in external demand along with capital spending and private consumption; FY17 estimate of 1.5% is also likely to be upgraded; Expected that figures will be approved at next week's Cabinet meeting.

Looking ahead: BoJ Tankan survey due for release on Friday.

Korea

Kospi opened +0.2%, later extended gains

Samsung Electronics +1.5%

LG Electronics +5% (amid positive broker commentary)

Banks add onto Wednesday’s gains: Woori Bank +2.5%, Shinhan Financial +1.8%

Bank of Korea Gov Lee: No significant market impact from Fed rate hike

South Korea Vice Fin Min Hyoung-Kwon: Korea market anxiety over FOMC rate hike isn’t big; Great uncertainty regarding pace of US tightening; Korea to prepare for US tightening with preemptive steps

(KR) South Korea will supply 1M registered private rent houses over the next 5-yrs - Korean press

(CN) China MOFCOM: China to strengthen economic and trade cooperation with South Korea

Looking ahead: South Korea Nov Trade Balance due for release on Friday

China/Hong Kong

Hang Seng opened +0.4%, Shanghai flat

Hang Seng Property Index +1%; China Nov home sales hit 5-month high

Hang Seng Materials Index +1.2%, Financials Index -0.3%

Hang Seng Consumer Goods Index +0.8%: CHINA NOV RETAIL SALES Y/Y: 10.2% V 10.3%E; YTD Y/Y: 10.3% V 10.3%E

PBoC raised rates connected to open market operations (OMO) and medium-term lending facility (MLF) after US Fed rate hike

(CN) PBoC commented on its rate moves: Said OMO rate hike reflects market supply and demand; Normal reaction to Fed rate increase; OMO rate hike to ease market distortion; Interest rate adjustment was less than market expectation

(CN) China former PBOC economist: monetary policy should move toward tight bias; OMO rate hike warns speculator - Xinhua

(HK) Hong Kong Monetary Authority (HKMA) raises base rate by 25bps to 1.75%, inline with US Fed move: ***Insight: Because the HK$ is pegged to the USD Hong Kong generally follows the Fed's moves.

(CN) China State Council: China will step up supervision over state assets and SOEs with differentiated regulatory policies for state firms and more emphasis on overseas projects

(CN) China Banking Regulatory Commission (CBRC) Fan Wenzhong: Will steadily advance liberalization of the banking industry following the latest government move to widen foreign access to the financial sector

(HK) Hong Kong Monetary Authority (HKMA) Chan: This is an abnormally low rate environment for mortgages; Home price can’t be divorced from purchasing power

(CN) China MOFCOM: Hopes US tax cuts 'worries' won't materialize

USD/CNY (CN) PBoC sets yuan reference rate at 6.6033 v 6.6251 prior (highest fix since Nov 23rd)

(CN) PBOC Open Market Operations (OMO): injects CNY50B v CNY130B prior in 7 and 28-day reverse repos v skips prior; Net drains CNY190B v injects CNY60B prior; raises yield on 7-day reserve repo to 2.5% from 2.45%; 28-day yield to 2.8% from 2.75%

(CN) PBOC LENDS CNY288B V CNY188B PRIOR IN MEDIUM-TERM LENDING FACILITY (MLF); OFFERS 1-YEAR LOANS AT 3.25% V 3.20% PRIOR

(CN) CHINA NOV INDUSTRIAL PRODUCTION Y/Y: 6.1% V 6.1%E ; YTD Y/Y: 6.6% V 6.6%E

(CN) CHINA NOV YTD URBAN FIXED ASSETS Y/Y: 7.2% V 7.2%E; NBS said fixed-asset investment slowing and steadying

(CN) China Nov Foreign Direct Investment (FDI) CNY124.9B, +90.7% y/y; YTD CNY803.6B, +9.8% y/y

(CN) Jan-Nov Outbound Direct Investment (ODI) $107.8B, -33.5% y/y

(CN) China MOFCOM: Notes 'irrational' ODI was been effectively curbed; no new ODI in property, sports and entertainment.

Chinese officials comment on taxes amid proposed US tax reforms

(CN) China National Bureau of Stats (NBS): Companies in China see heavy tax burden, there is room for China to further cut taxes and fees; Sees 'necessity' to further tackle tax burdens.

(CN) China MOFCOM: Hopes US tax cuts 'worries' won't materialize; no new ODI in property, sports and entertainment; Hopes US can fulfill promise to create stable environment for investors from other countries including China; hopes US will not set obstacles for investors during assessment of deals; Encourages domestic companies to import natural gas

China Conglomerate HNA Group: Strength in share price and US dollar denominated bond prices comes amid speculation regarding financing talks

Australia/New Zealand

ASX 200 opened +0.1%, closes -0.1%; Energy Index +0.7%, Materials +0.6%; REIT Index -0.7% (outperformed on prior session, higher interest rates)

Refiner Caltex Australia +3%: Australia competition regulator to oppose Woolworth’s sale of service stations to BP (A$1.79B transaction)

Department Store Myer Holdings -8% (cautious H1 guidance)

Aussie extends gains to 1-month high amid employment data and Nov Chinese data

Aussie 3-year bond yield rises over 5bps following employment data

(AU) AUSTRALIA NOV EMPLOYMENT CHANGE: 61.6K V +19.0KE; UNEMPLOYMENT RATE: 5.4% (near 5-year low) V 5.4%E; Participation Rate: 65.5% v 65.1%e (matches highest reading since Sept 2011)

(AU) Australia Dec Consumer Inflation Expectation: 3.7% v 3.7% prior(

(NZ) New Zealand Treasury half-year economic and fiscal update: keeps 2017/18 bond program unchanged at NZ$7.0B; Cut 2017/18 and 2018/19 GDP growth forecasts; raised 2018 CPI forecast; Sees smaller budget surpluses in coming years

WOW.AU ACCC to oppose BP's purchase of Woolworth service stations; -0.6%

MYR.AU Guides H1 adj Net materially lower y/y; profit and sales deteriorated in recent weeks; -7.6%

Other Asia

(MY) World Bank raises Malaysia 2017 GDP growth forecast to 5.8% from 5.2%; sees 2018 GDP growth at 5.2%

Looking Ahead: India Nov Wholesale Price Index (WPI) due for release later today

North America

US equities ended mostly higher: Dow +0.3%, S&P 500 -0.1%, Nasdaq +0.2%, Russell 2000 +0.6%

S&P 500 Consumer Staples Sector +0.6%; Financials -1.2%

FED: (US) FOMC RAISED TARGET RATE RANGE 25BPS TO 1.25-1.50% (AS EXPECTED); Vote 7-2 (Evans and Kashkari dissent); Confirms average Fed official looking for 3 hikes in 2018

(US) FOMC UPDATED ECONOMIC FORECAST FOR DEC MEETING (V. SEPT); Cuts midpoint of 2017 Core PCE inflation forecast to1.5% (prior 1.5-1.6%), Cuts 2018 Core PCE forecast to 1.7-1.9% (prior 1.8-2.0%)

(US) Fed Chair Yellen: seen pickup in economic growth and business investment, as well as improvement in economies abroad - post FOMC decision comments; Fed did discuss tax policy, most of colleagues did put fiscal stimulus into projections

Tax Reform: (US) House and Senate leaders said to have reached an agreement in principle on tax reform bill – press

(US) Sen Finance Chair Hatch (R-UT): confirmed GOP has reached deal on tax legislation; confident there are sufficient votes to passed agreed-upon deal

M&A: 21st Century Fox: Reportedly Disney deal to value Fox at just over $40/shr, paying up to $29/shr for Fox assets – press

Energy: (US) DOE CRUDE: -5.1M V -3ME

Looking Ahead: US President Trump to update on deregulation efforts on Thursday, US Nov Retail Sales due

Europe

(UK) UK govt loses vote on EU withdrawal bill amendment by 309-305; House of Commons votes to give lawmakers final say on Brexit deal – press; Marks the first time PM May has lost a vote in the Commons on her Brexit plans

(DE) German DIHK Chambers of Commerce: Brexit may raise Germany EU cots by €8B/year – US financial press

(UK) Nov RICS House Price Balance: 0% v 0%e

M&A: Gemalto: Atos confirms its proposed all-cash public offer at a price of €46.0 per Gemalto share (Follows the offer being rejected)

Shell: Reportedly to sell Agentina downstream assets to Raizen for $1B - press

Norske Skog [NSG.NO]: Appointed Evercore Partners to act as its financial adviser in connection with a sale of Norske Skog AS and its subsidiaries by way of a competitive sale process which will commence imminently

Looking ahead: European rate decisions due later today from SNB, ECB and BoE, along with EZ Prelim DEC PMI data, UK Nov Retail Sales and IEA Monthly report

Levels as of 01:00ET

Nikkei225 -0.3%, Hang Seng -0.5%; Shanghai Composite -0.5%; ASX200 -0.2%, Kospi +0.7%

Equity Futures: S&P500 0.0%; Nasdaq100 0.0%, Dax +0.1%; FTSE100 -0.0%

EUR 1.1843-1.1822; JPY 112.79-112.53; AUD 0.7675-0.7628;NZD 0.7024-0.6997

Feb Gold +0.9% at $1,260/oz; Jan Crude Oil +0.2% at $56.70/brl; Mar Copper -0.5% at $3.04/lb

Key Highlights

• The Euro failed to move above 133.80 recently and corrected lower against the Japanese Yen.
• EUR/JPY is approaching a major break as there is a contracting triangle forming with support at 132.60 on the 4-hours chart.
• The US Core CPI in Nov 2017 posted an increase of 1.7%, less than the forecast of 1.8% (YoY).
• The feds raised interest rates from 1.25% to 1.50% with stable outlook for 2018.

EURJPY Technical Analysis

There was a decent recovery in the Euro above 133.50 recently against the Japanese Yen. However, the EUR/JPY pair faced a strong sell zone and is currently correcting lower.

Looking at the 4-hours chart, there are a few important points to note. First, there is a crucial contracting triangle forming with support at 132.60. Second, the triangle support at 132.60 is around both key SMA’s – 100 (red) and 200 (green). Last, the triangle resistance played a major role recently and prevented gains above 134.00.

Recently, the pair traded below the 50% Fib retracement level of the last wave from the 132.25 low to 133.88 high. The triangle support around 132.60-80 which is around the 61.8% Fib level of the same wave protected further losses.

The 132.60 support zone holds a lot of significance. EUR/JPY has to stay above 132.60 and the 100 SMA (red, 4-hour) to avoid any further declines.

On the flip side, a break above the 133.80 level can ignite more gains above 134.00. The next target could be around 134.50 and 135.00.

Market Recap – US CPI and Fed Interest Rate Decision

Recently, the US market saw two important releases – CPI for Nov 2017 and the Fed interest rate decision. The US Core CPI was forecasted to post an increase of 1.8% (YoY), but it increased by 1.7%.

In terms of the monthly change, there was a rise of 0.1% in the Core CPI, which was less than the forecast of +0.2%. The report mentioned that:

The energy index rose 3.9 percent and accounted for about three-fourths of the all items increase. The gasoline index increased 7.3 percent, and the other energy component indexes also rose. The food index was unchanged in November, with the index for food at home declining slightly.

More importantly, the feds raised interest rates from 1.25% to 1.50% for the third time in 2017. The outlook for 2018 was unchanged by the central bank.

The impact was bearish on the US Dollar as the risk sentiment was boosted. USD/JPY moved down below 113.00, GBP/USD jumped above 1.3400 and EUR/USD traded above the 1.1820 resistance.

For the 24 hours to 23:00 GMT, the AUD rose 1.01% against the USD and closed at 0.7632.

LME Copper prices rose 1.1% or $71.0/MT to $6685.0/MT. Aluminium prices declined 0.4% or $7.0/MT to $1997.0/MT.

In the Asian session, at GMT0400, the pair is trading at 0.7668, with the AUD trading 0.47% higher against the USD from yesterday’s close, after Australia’s seasonally adjusted unemployment rate remained steady at a five-year low of 5.4% in November, meeting market expectations.

Moreover, the number of people employed in Australia jumped more-than-anticipated by 61.6K in November, rising by the most in more than two years. Markets had envisaged for an increase of 19.0K, following a revised gain of 7.8K in the prior month. Meanwhile, the nation’s consumer inflation expectations remained steady at 3.7% in December.

Elsewhere in China, Australia’s largest trading partner, retail sales grew 10.2% YoY in November, falling short of market expectations for a gain of 10.3%. In the previous month, the nation’s retail sales had risen 10.0%. Moreover, the nation’s industrial production climbed 6.1% on an annual basis in November, at par with market expectations and after recording an increase of 6.2% in the prior month.

The pair is expected to find support at 0.7590, and a fall through could take it to the next support level of 0.7511. The pair is expected to find its first resistance at 0.7711, and a rise through could take it to the next resistance level of 0.7753.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the EUR rose 0.72% against the USD and closed at 1.1823, after data showed that the Euro-zone's seasonally adjusted industrial production unexpectedly rebounded 0.2% on a monthly basis in October, confounding market expectations for a flat reading. In the prior month, industrial production had dropped by a revised 0.5%.

Additionally, Germany's final consumer price index (CPI) advanced 1.8% on an annual basis in November, confirming the preliminary print. The CPI had registered a gain of 1.6% in the prior month.

The greenback declined against its major counterparts, after the Federal Reserve (Fed) lifted its key interest rate, as widely expected, but left its outlook for 2018 interest rates hikes unchanged, amid persistently weak inflation.

The Fed, at its latest monetary policy meeting, voted 7-2 to raise its benchmark interest rate by a quarter percent point to a range of 1.25% to 1.50%, citing a tightening labour market and strengthening economy. Further, the central bank raised its US economic growth forecast to 2.5% in 2018, up from 2.1% estimated earlier, as officials expect a modest boost to the economy from the Trump administration's possible fiscal stimulus. The central bank stuck to its projection of three rate hikes in 2018 and confirmed that it would step up the monthly pace of shrinking its balance sheet to $20.0 billion beginning in January.

On the economic front, consumer prices in the US increased 0.4% on a monthly basis in November, meeting market expectations and compared to an advance of 0.1% in the prior month.

On the other hand, the nation's MBA mortgage applications retreated 2.3% in the week ended 08 December, following a rise of 4.7% in the prior week.

In the Asian session, at GMT0400, the pair is trading at 1.1835, with the EUR trading 0.1% higher against the USD from yesterday's close.

The pair is expected to find support at 1.1762, and a fall through could take it to the next support level of 1.1689. The pair is expected to find its first resistance at 1.1876, and a rise through could take it to the next resistance level of 1.1917.

Moving ahead, investors would eye the European Central Bank's (ECB) interest rate decision, scheduled later in the day. Additionally, the release of the flash Markit manufacturing and services PMIs for December across the Euro-zone, will keep investors on their toes. In the US, advance retail sales for November, the preliminary Markit manufacturing and services PMIs, both for December and the initial jobless claims data, due to release later in the day, will garner significant amount of market attention.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the GBP rose 0.71% against the USD and closed at 1.3412, after data pointed to a pick-up in the UK wage growth.

Britain's average earnings excluding bonus climbed more-than-expected by 2.3% on an annual basis in the August-October period, compared to a rise of 2.2% in the July-September period. Market had anticipated the nation's average earnings excluding bonus to gain 2.2%.

However, the nation's ILO unemployment rate unexpectedly remained unchanged at a 42-year low of 4.3% in the August-October period, while markets had envisaged for a drop to 4.2%. Moreover, the number of people employed in the nation declined by 56.0K in the three months to October, hitting its lowest in over two years. Market participants had expected the nation's employment to ease 40.0K, after registering a decline of 14.0K in the July-September period.

In the Asian session, at GMT0400, the pair is trading at 1.3433, with the GBP trading 0.16% higher against the USD from yesterday's close.

The pair is expected to find support at 1.3347, and a fall through could take it to the next support level of 1.3261. The pair is expected to find its first resistance at 1.3484, and a rise through could take it to the next resistance level of 1.3535.

Trading trend in the Pound today is expected to be determined by the Bank of England's (BoE) monetary policy decision, scheduled later in the day. Additionally, traders would focus on UK's retail sales data for November, set to release in a few hours.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD declined 0.76% against the JPY and closed at 112.70.

In the Asian session, at GMT0400, the pair is trading at 112.58, with the USD trading 0.11% lower against the JPY from yesterday's close.

The Japanese Yen gained ground against the USD, after data revealed that Japan's preliminary Nikkei manufacturing PMI registered a rise to a level of 54.2 in December, expanding at its fastest pace in nearly four years and compared to a reading of 53.6 in the previous month. Additionally, the nation's final industrial production rose 0.5% on a monthly basis in October, confirming the preliminary print. In the prior month, industrial production had dropped 1.0%.

The pair is expected to find support at 112.21, and a fall through could take it to the next support level of 111.84. The pair is expected to find its first resistance at 113.2, and a rise through could take it to the next resistance level of 113.82.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD declined 0.56% against the CHF and closed at 0.9862.

In the Asian session, at GMT0400, the pair is trading at 0.9844, with the USD trading 0.18% lower against the CHF from yesterday's close.

The pair is expected to find support at 0.9815, and a fall through could take it to the next support level of 0.9786. The pair is expected to find its first resistance at 0.9901, and a rise through could take it to the next resistance level of 0.9958.

Moving ahead, investors would look forward to the Swiss National Bank's (SNB) monetary policy meeting, scheduled in a few hours.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD declined 0.4% against the CAD and closed at 1.2821.

On the data front, Canada's Teranet/National Bank house price index fell 0.5% on a monthly basis in November. In the prior month, the index had dropped 1.0%.

In the Asian session, at GMT0400, the pair is trading at 1.2813, with the USD trading 0.06% lower against the CAD from yesterday's close.

The pair is expected to find support at 1.2777, and a fall through could take it to the next support level of 1.2740. The pair is expected to find its first resistance at 1.2865, and a rise through could take it to the next resistance level of 1.2916.

Moving ahead, a speech by the Bank of Canada (BoC) Governor, Philip Lowe, will be closely monitored by investors.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.