This week, financial markets will follow the FOMC minutes of the latest Federal Reserve meeting, in light of the divergence in interest rate cut in the coming period and fears that the US economy may relapse into recession.
It is also possible to see a wide range of monetary policy headlines at the Federal Reserve's Monetary Policy meeting at Jackson Hole, Wyoming, scheduled for August 22-24.
In addition, markets are expected to continue to monitor the latest developments in the US-China trade dispute.
Minutes could guide investors on dollar
The U.S. dollar will undergo serious tests this week as the minutes of the Federal Reserve's July meeting will be released.
The minutes of the meeting could reveal the extent to which members of the FOMC tend to cut interest rates in the coming period, as recession fears spread and the US-China trade war intensified.
The preliminary August manufacturing and services PMI report may also receive some attention as it will reflect the state of economic activity in the third quarter.
Last but not least, Federal Reserve Chairman Jerome Powell is scheduled to deliver a speech titled "Monetary Policy Challenges" at the Jackson Hole Economic Policy Symposium.
Euro to get clues from PMI data
The minutes of the ECB monetary policy meeting will give an in-depth look at the economic conditions that have influenced interest rate decision and economic stimulus plans, which could affect the euro's movements this week.
On the economic data front, investors will focus on the eurozone's composite manufacturing and services PMI, which may show a slight decline in growth in August to 51.1 from 51.9 in July.
Also, the final consumer prices reading in the euro area is due this week and may confirm stabilization at 1.1 percent in the year ended July.
Pound will attempt to rebound
The pound rose to a one-week high against the dollar by the end of last week, as the campaign to prevent Brexit in October gained further support.
The pound's movements this week may depend on the latest developments in the Brexit since there are no significant economic data coming out of Britain.
Hence, the pound is likely to move in line with the general trend in the market and the latest political developments within the United Kingdom.
Gold, oil may extend gains
Gold took advantage of trade tensions between the United States and China, rising recession fears and slowing global growth to hit a new record high at $1,534 an ounce.
Gold prices will depend this week on the overall situation in the markets. In case of continuing concerns, the bullish trend could gain further momentum.
Regarding oil, prices found some support by the end of last week after some data showed a rise in US retail sales, which helped ease fears of recession in the world's largest economy.
Oil price movements will depend on optimism or pessimism in the market
should there be any developments in the US-China negotiations and the US
government's weekly report tracking the crude inventories.