News & Analysis

FX markets this week struck a classic risk-on tone, driven by expectations of more dovish Federal Reserve following Powell’s Jackson Hole speech and a slip in August’s Nonfarm Payrolls, while the Aussie and Kiwi dollars benefitted from improving Covid-19 backdrops as their vaccination pushes picked up speed. Next week, price action in US fixed income markets will continue to garner a lot of market attention, while increasingly hawkish central bank developments will also be in scope. Of note is the Reserve Bank of Australia, who we expect to press on with tapering their QE programme, the Bank of Russia who are expected to hike by 50bps, the National Bank of Poland who will battle with record high inflation, and the European Central Bank. The ECB are set to contend with increasing calls from Northern European Governors to reduce the pace of PEPP purchases despite a still uncertain economic outlook. We expect the ECB to reduce the pace of PEPP purchases in Q4, but for the message to be delivered in a still dovish manner by President Lagarde.

Read Monex’s Week Ahead:



Simon Harvey, Senior FX Market Analyst
Olivia Alvarez Mendez, FX Market Analyst



This information has been prepared by Monex Canada Inc., an execution-only service provider. The material is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is, or should be considered to be, financial, investment or other advice on which reliance should be placed. No representation or warranty is given as to the accuracy or completeness of this information. No opinion given in the material constitutes a recommendation by Monex Canada Inc., or the author that any particular transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, it is not subject to any prohibition on dealing ahead of the dissemination of investment research and as such is considered to be a marketing communication