In September, the drivers of the currency market are likely to be:

• High employment and inflation data, indicators of sustainable growth out of recession. Central banks, particularly in the US, will use this data to evaluate whether changes to monetary policy are required.
• US Federal Reserve’s commentary on September 23. After more of the same cautious commentary at the Jackson Hole Symposium and disappointing August jobs data, any plans from the Fed on the timing of unwinding bond purchases or raising interest rates could surprise the market and trigger volatility.
• Investor risk appetite could be sustained as the Fed maintain monetary policy for now. Headlines around the threat of COVID-19 variants to global recovery could cause a shift to risk-off.

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