Dollar is trading with a soft tone as markets start the week quietly. Fed vice chair Stanley Fischer said over the week end that its "an expectation" that Fed will hike interest rate this year, "not a commitment". He emphasized that "both the timing of the first rate increase and any subsequent adjustments to the federal funds rate target will depend critically on future developments in the economy". And, there are still "considerable uncertainties" around the economic outlook, including recent drop in job growth. Nonetheless, he talked down the impact of the international developments including China as "we do not currently anticipate that the effects of these recent developments on the US economy will prove to be large enough to have a significant effect on the path for policy."
On the other hand, Richmond Fed president Jeffery Lacker said that Fed has achieved in its goal of full employment and "exhausted relevant slack in the labor market." And he warned that "pushing on to wring more slack out -- there are some risks associated with that," and inflation "risks can be very real". Meanwhile, he said recent slowdown in employment probably "represents a significant tightening in the labor market." And, "the longer we keep real interest rates so far out of alignment with consumption growth, the more risk we run."
In Eurozone, ECB president Mario Draghi said that policy makers are "satisfied" with QE and hailed that "it has met and even surpassed our initial expectations." He added that "it presently appears that it will take somewhat longer than previously anticipated for inflation to come back to, and stabilize around, levels that we consider sufficiently close to 2 percent."
Speaking in an interview on the sidelines of an IMF event in Peru, BoJ governor Haruhiko Kuroda said that "if necessary, we can further ease our monetary policy but at this moment the inflation dynamics is as we anticipated. So, at this stage we just continue QE, but if necessary we can adjust." That is seen as an indication that BoJ would ease again in October.
The economic calendar is empty today with Japan, Canada and US on bank holiday. Main focus will be on speeches from some Fed officials including Lockhart, Evans and Brainard. BoC governor Poloz will also speak.