Good morning,

Last week proved to be positive for GBP, fairly positive for EUR and muddled for USD - It seems likely The Fed does not have a compelling picture for tapering in September, although many traders do believe that it will be announced at the September FOMC meeting. Market consensus is that GBP/USD will maintain or improve in the next few weeks but expects a turnaround within 3 months with tapering potentially bring the pair back towards 1.5000.

This week will start slowly with respect to data releases. The first significant event will be the National Bank of Australia minutes release in the early hours of Tuesday. The Australian dollar has strengthened significantly since the Reserve Bank of Australia (RBA) cut interest rates by 25bps to a record low 2.50% earlier this month. Markets seem to have reduced expectations of further rate cuts as the RBA bias is viewed as being more neutral. However we think that dovish rhetoric may resurface from policymakers and as such the current GBP/AUD levels may represent an excellent opportunity to buy AUD.

The big events of the week however will be:

Wednesday evening, the market will be looking for further hints from the the FOMC minutes (Similar to the BoE minutes from the UK) as to when tapering may start.

Friday morning sets up a match between German Q2 GDP and UK Q2 GDP - this no doubt will have a significant impact on GBP/EUR.