• Main theme driving the FX market: Upbeat global corporate earnings in the first half of the week had inspired a rally in risky assets though it lost momentum ahead of the weekend, spurring demand for the yen as a place of shelter. The greenback tumbled to a three-month low against a basket of a half-dozen currencies.

• Australian dollar: The Aussie buck traded from strength to strength despite disappointing CPI figures last week. Regardless of this mid week unwind, the currency traded in a 10 week high range against the Greenback. Investor’s revisions of the RBA’s August interest rate decision also kept the Aussie relatively subdued in its recent ranges.

• U.S. dollar: The dollar took a drubbing, falling to a 3-month low against the euro and to multi-month lows against sterling and the Aussie, as discouraging indicators backed market views of a tepid pace of recovery over the balance of the year. U.S. consumer confidence hit a 5-month low in July, pointing to subdued household spending ahead. U.S. GDP slowed to a 2.4% annual rate in Q2, a marked decline from the 3.7% pace in Q1. Month-end positioning compounded the buck’s softer bias.

• Euro: The euro rose a new early May peak against the buck and to a 2-month high against the yen as improved investor sentiment and upbeat data from the bloc eased concerns about the zone’s debt crisis. Better-than-expected euro zone economic sentiment, which rose to a 28-month high in July, contrasted generally weak U.S. data and bolstered the euro. Last week’s European bank stress tests were generally well-received by markets, providing the euro with additional backing.

• Japanese yen: The yen finished a choppy week around a fresh 8-month high against the greenback and a one-week peak against the euro as soft U.S. indicators triggered concerns about the strength of the global recovery. The yen’s latest uptrend put it precariously close to the 15- year high it hit against the dollar last November, a level sure to attract the ire of local officials.

• Australia: The Australian Dollar will be headlined by the RBA meeting on Tuesday. Expectations are that the central bank will keep rates on hold at 4.50% on the back of the disappointing CPI figures.

• United States: The U.S. monthly jobs report on Friday should hog the spotlight. A poor nonfarm payrolls report for June would keep pressure on the buck and justify the Fed’s vow to hold interest rates low over the next several months. Investors will also study data on manufacturing, personal income and personal spending for hints on the strength of the recovery.

• Euro-zone: Top billing goes to the Thursday ECB meeting at which the euro zone central bank is forecast to keep rates unchanged at a record low 1%. Still, market players will listen carefully to the central bank president’s news conference which follows its policy decision. Indicators on euro zone manufacturing, wholesale inflation and retail sales are due out.

• Britain: The BOE policy meeting Thursday will highlight a busy week for U.K. market events. The BOE is widely forecast to keep rates steady at 0.5%, a record low to aid the recovery. Data on Britain’s manufacturing sector will also garner significant investor attention.

• Japan: A slow start to the month of August will see market watchers wait until Friday’s report on leading indicators for a peek at how Japan’s recovery might look in the months ahead. Global equities and indicators out of the U.S. and euro zone should also influence the yen’s behaviour.