The main question on investors’ minds going into this month’s highly anticipated FOMC meeting is, has the August US labour report derailed plans for a September taper announcement?

The US job openings surged to another all time high. ECB cut asset purchases under PEPP, but Lagarde emphasised this isn’t tapering. Dollar rose, while risky assets wobbled.

Thursday’s announcement from the ECB marks a slight adjustment in monetary policy as the Governing Council unanimously decided to moderately slow down the pace of asset purchases under the pandemic emergency purchase programme (PEPP).

This Thursday’s European Central Bank meeting will be the main event risk in the FX market this week.

The US employment report disappointed, negatively affecting the US dollar. Risky assets continued their rally.

The key event of last week was as expected the Jackson Hole conference of central bankers. Powell's generally dovish speech sent most major currency higher against the US dollar, as it suggested that the Fed Chair remains unconcerned by the recent spike in inflation and is in no hurry to remove accommodation, let alone raise rates.

Concerns surrounding the spread of the delta variant globally and a hawkish set of FOMC meeting minutes sent the US dollar sharply higher last week.

The dollar fell against its major peers on Friday afternoon following the release of a poor consumer confidence report.