USD - The dollar is mixed this morning as the Fed begins their monthly two-day meeting. With the ECB and BoE also set to convene later this week, investors are largely on hold this morning, unwilling to take a substantial position in stocks, commodities or currencies before such heavily awaited meetings. Data this morning further supports the case for easing from the Fed as personal spending unexpectedly stagnated. The measure fell short of the expectations of a 0.1% gain, but was slightly improved from last month's downwardly revised 0.1% contraction. Meanwhile, personal income gained by more than was expected at 0.5% versus 0.3% in the previous reading. Moreover, consumer confidence rose to 65.9 from 62.7 last month and Chicago PMI beat expectations coming in at 53.7. While better wages and improving confidence are certainly a step in the right direction, a rebound in overall economic growth is unlikely until the improved sentiment translates into consumption. As such, investors hope that supportive action from the central bank could encourage a resurgence in consumer spending. The dollar will thus likely remain relegated to within its recent ranges through the middle of the week with expectations of Fed action providing direction.

EUR - The euro traded through a particularly volatile overnight session ahead of this Thursday's ECB decision. President Draghi is reportedly advocating a plan that would have the EFSF purchase sovereign debt on the primary market, supported by ECB purchases on the secondary market. However, finding support amongst the region's core economies is proving to be problematic, with policymakers in those nations saying the purchases blur the line between monetary and fiscal policy. While the heads of state appear to be on Draghi's side, finance officials are in clear opposition. Moreover, there appears to be a growing political divide amongst Germany's ruling coalition over the structure of the Eurozone's rescue funds. Earlier in the month, ECB officials proposed issuing the ESM - the region's permanent "bailout fund" - a banking license, which would ease its access to capital. However, the German Finance Ministry issued a statement today that it sees no need for the license. Such contention within the currency bloc combined with lofty expectations for this Thursday's ECB meeting leaves the common currency vulnerable to further weakness should the policy announcement fall flat.

GBP - Sterling is lower this morning, snapping a three-day gain against its European counterparts, after Moody's downgraded the outlook for British economic growth. The pound also slipped lower after an industry report showed that UK consumer confidence stalled in July. As such, economists have been quick to downgrade their own forecasts for the British economy mounting expectations that the BoE will ease policy further before the end of the year.

JPY - The yen extended its recent gains as investors avoid riskier positions ahead of this week's central bank meetings. With no major economic data due out of Japan until next week, the yen will remain supported by the appeal of its relative safety.

Commodity Currencies - The commodity linked currencies are mixed this morning as raw goods swing between gains and losses. Oil pushed lower to $88/bbl, while gold and copper both gained to $1621/oz and $342/lb respectively. The CAD reversed overnight gains in early trading after a government report showed that the Canadian economy grew by less than expected, up 0.1% versus 0.3% in the previous reading. Similarly, the MXN is slightly lower this morning as investors' risk appetite wanes. However, the weakness in the peso may be short lived as officials expect that growth in the Mexican economy has picked up pace in the second quarter. Meanwhile, the AUD and NZD both edged higher as expectations of monetary easing in both Australia and New Zealand eases. Combined with their AAA credit ratings, the Aussie and Kiwi are increasingly attractive to international investors