Hawkish policymakers put markets on alert

As people back to their desks after summer, the uncertainty of trimming down the pandemic-era stimulus is at the forefront of the attention, considering the G10 central banks' meetings planned for September. Added to these uncertainties is the debate over the US national debt.

Markets await ECB meeting this week

The Fed may postpone tapering until at least November after the disappointing US employment report last week, but the ECB may opt to follow its hawkish stance this week.

There should be some interesting discussions at the European Central Bank meeting on Thursday as the bank is set to slow the pace of its bonds-purchasing program as many hawkish policymakers push for the ECB to begin discussing the end of a stimulus program.

After rising for six consecutive days, the EURUSD is trading under the pressure of edging up the dollar on Monday, approaching the uptrend line in a 4-hour time frame. The pair is likely to find support above 1.18450. Any signal from ECB to sooner-than-expected cut stimulus in any kind of PEPP pace down or hiking interest rates would give Euro more room to gain against the US dollar, riching the monthly record high at 1.19080.

Central banks are likely to slow pace stimulus

The Reserve Bank of Australia meets on Tuesday, and investors are waiting to see if or not the bank sticks to its current plan to cut stimulus. Even as the Delta variant spreads and the economy slows, the RBA will feel pressure to delay tapering-- or reverse the program.

Furthermore, Norway will become the first country in the G10 group of developed economies to raise interest rates off 0% in its future meeting later this month.