UBS - "The dollar index DXY remains at the bottom of its 81-85 summer trading range. Ten year US Treasury yields have traded through 2.80% for the first time in two years as America's economy continues to recover. But stronger Eurozone and UK data at the same time is preventing the dollar benefiting from the dovish stance of the European Central Bank and the Bank of England.
Nevertheless, we think the Federal Reserve's policymaking remains the key driver of foreign exchange markets. With the Federal Open Market Committee still set to favour tapering asset purchases when it meets on September 17-18, the greenback is likely to resume its long-term uptrend against the other major currencies. This week's key points are:
- FOMC minutes central for dollar bulls
- Eurozone PMI key in the week ahead for euro
- sales tax debate keeping USDJPY capped for now
- strong UK dataflow but Cable looks overdone
- no SNB signal on floor, stay bullish EURCHF
- RBA minutes may harden easing bias"