An empty economic calendar has left the US Dollar to trade on speculation surrounding the Fed’s intention to slim down its stimulus effort in September.

Talking Points

Absence of US, European Event Risk Leaves Markets to Ponder Fed “Taper” Outlook
Australian and NZ Dollars Rose in Asia, Chinese Property Prices Data a Possible Spark

The economic calendar is empty in European and US trading hours, pointing to pre-positioning ahead of the week’s key event risk as the likely driver of price action. Speculation surrounding the Federal Reserve’s intention to “taper” its monthly asset purchase effort is in focus. The central bank is due to release minutes from July’s meeting of the FOMC rate-setting committee on Wednesday. The annual Jackson Hole Symposium is also due to begin on Thursday. The summit has long served as a platform for unveiling key changes in Fed policy and managing the end of QE seems likely to feature heavily this time around.

As it stands, various surveys of economists suggest a consensus view that envisions a September move to reduce asset purchases by $10 billion. A strongly dovish message countering that status quo is likely to broadly weigh on the US Dollar. Alternatively, rhetoric on the hawkish side of the spectrum will probably produce the opposite effect.

The Australian and New Zealand Dollars outperformed in otherwise quiet Asian trade. The currencies added as much as 0.5 and 0.3 percent respectively against their leading counterparts. The move may reflect July’s Chinese Property Prices data published over the weekend. The figures showed that all but one of the 70 major cities surveyed saw a year-on-year increase in residential apartment prices for a third consecutive month. That may have calmed fears about Beijing’s recent efforts to rein in the property market, boosting currencies anchored to Chinese economic growth trends.

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