The focus is on the Fed - Commerzbank

After the ECB got the ball rolling last week by cutting its deposit rate by 25 basis points, a number of other central banks will announce their policy decisions this week. Some of the decisions could be quite close, but in the end most are likely to leave rates unchanged -- except, of course, for the most important one. It would be a big surprise if the Fed did not begin its rate cut cycle on Wednesday. The only question is whether it will start with 25 or 50 basis points, Commerzbank's FX strategist Volkmar Baur notes.

50% chance of a big first move by the Fed

"At the start of the week, the market is pricing in a little bit more than a 50% chance of a big first move by the Fed. Our economists still expect a move of 25 basis points, and there is a good case to be made for that. But a small first move does not preclude a big one later. That is why the risks are currently tilted towards dollar weakness."

Norges Bank and the Bank of England will follow on Thursday. In both cases, rates are likely to remain unchanged as inflation risks in both countries remain on the upside. However, while Norges Bank's decision is likely to be fairly clear (the market is not pricing in any change), the situation in the UK is somewhat different."

"According to Bloomberg, most economists here also do not expect any change. However, the market is pricing in a 25% chance of a cut. The day before, the inflation figures will be released. The expected rise in the core rate is one of the reasons why we do not expect a change in the key rate. However, if this does not happen, the BoE's decision could become more difficult after the recent weaker economic data."