UK Industrial Production (NOV) (09:30 GMT; 04:30 EDT)
                      (MoM)          (YoY)
Consensus:      0.3%           0.4%
Previous:          -0.8%          0.6%

Outlook: The UK Industrial Production is expected to rebound to 0.3% from a prior month decline of -0.8%. Industrial Production has been the Achilles heel of the UK economy, as producers have been hobbled by high energy costs and very unfavorable exchange rate differentials.  Industrial Production has been persistently negative throughout most of last year but has picked up in the  final quarter posting three consecutive months of year over year gains.

Previous:  The UK industrial and manufacturing sector output was much lower than expected in October as a stronger pound limited demand for exported products. Oil and gas led declines at -2.6%, bringing the annual rate of production to drop a whopping 10.7% over the last year. Meanwhile, mining and quarrying also dipped at a rate of 2.3% during the month and posting an annual figure of -10.1%. Overall, the data does not bode well for the sector at all and highlights its extremely fragile growth. Furthermore, the data will likely have a negative impact on GDP for Q4.

Bank of England Rate Decision (12:00 GMT; 05:00 EDT)
Consensus:            5.00%
Previous:               5.00%

Outlook: The Bank of England is expected to keep rates unchanged at 5.00% and are not expected to issue a statement as is tradition when no policy change takes place. The minutes of the meeting will be available  on January 24th and traders will keenly read them for any signs of hawkishness from MPC members. Generally, market participants anticipate that if UK economic indicators including such releases as RICS housing, BRC Retail sales and labor and wage data continue to report healthy expansionary results, the central bank will raise rates by another 25bp before in the end of Q1 of 2007.

European Central Bank Rate Decision (12:45 GMT; 07:45 EDT)
Consensus:           3.50%
Previous:              3.50%

Outlook: The European Central Bank is expected to pass on changing the nationââ,¬â"¢s overnight lending rate from 3.50 percent at the conclusion of its policy meeting Thursday. However, as has become customary over the past few months, the marketââ,¬â"¢s real interest will be in the news conference that follows the officials decision at 18:30 GMT. The number of policy-worthy economic releases that have hit the newswires since the last meeting will certainly inject the remarks made ECB President Jean Claude Trichet with event risk. Over the few weeks, the Euro-zone has reported a 0.5 percent acceleration in retail sales, the lowest unemployment rate since records began in 1993 and region-wide confidence at six year highs. Looking to Germany, often the leader of the Union, statistics have been equally impressive. However, there are prominent risks that will not go unmentioned. Key among these cautionary flags will be Germanyââ,¬â"¢s VAT tax hike, from 16 to 19 percent, that went into affect on January 1st. With the effects of the is substantial economic hindrance not yet known, the policy board may wait to see how January numbers come across the board. Nevertheless, the market goes into the event with firm expectations for the term ââ,¬Ëœvigilanceââ,¬â"¢ (or its equivalent) to be issued. This has traditionally preceded a rate hike by a month or two.

John Kicklighter is a Currency Strategist at FXCM.