Ilya Spivak, Currency Analyst at DailyFX, comments:
“Markets are off to a slow start in the opening hours of the trading week. A lacklustre economic calendar offers little by way of market-moving event risk, opening the door for big-picture themes to take centre stage. That puts the spotlight on Fed policy considerations, where another busy week of “Fed-speak” including testimony from Chair Yellen likely to talk up QE cutback continuity. A variety of US economic activity indicators from regional Fed branches as well as reports tracking housing, consumer confidence and durable goods orders are also on tap.
“Steady underperformance relative to median forecasts on US economic outcomes hints analysts continue to underestimate the severity of the slowdown in the world’s largest economy, opening the door for another round of downside surprises. Where last week the toxic mix of Fed stimulus withdrawal and mounting growth concerns marked a break in sentiment’s recovery, the same dynamic this time around may tip the scales toward risk aversion. This bodes ill for sentiment-sensitive currencies like the Australian and New Zealand while boosting the US Dollar and the Japanese Yen.”