UBS - "The new month starts with a high degree of event risk. The US may launch strikes against Syria as early as this weekend. In the week ahead, the European Central Bank, the Banks of Japan, England and Canada, the Reserve Bank of Australia and the Riksbank all hold policy meetings. The US August payrolls report is due at the end of the week, and emerging market currencies are likely to face further pressure if America's employment data suggest the Federal Reserve will agree this month to start tapering its asset purchases.
Our base case remains to favour the dollar. The greenback has done well against emerging markets and commodity currencies like the Australian dollar this year. But it has lost ground against the euro, yen, pound and franc over the summer. A firm payrolls report will help the dollar resume its longer-term uptrend against the rest of the major currencies.
This week's key points are:
- payrolls still key for dollar despite geopolitical risks
- Draghi to stress forward guidance at ECB meeting
- yen shorts still need resolution on sales tax
- BoE on hold for now but remain wary Cable
- RBA to keep easing bias, stay bearish Australian dollar"