USD - With Bernanke's speech at Jackson Hole proving to be a nonevent, markets can concentrate on this week's heavy economic calendar as investors try to assess the degree of slowdown in the major economies. The US calendar will be dominated by the release of FOMC minutes, along with the ISM on Thursday and non-farm payrolls on Friday. The manufacturing ISM index for August is expected to drop to 45.0 from 50.9. This comes in the wake of a series of negative regional PMI surveys, with the Philly Fed survey in particular taking a massive hit, dropping more than 30 points. We expect Thursday's ISM reading to constitute a lower limit for the time being, but with a rebound to be expected over the coming months. On Friday, payroll figures are expected to show a moderate increase in employment. Hence, we should see an addition of 115,000 non-farm payrolls and 100,000 to private payrolls. However, public sector employment should remain weak, as debt talks have put government hiring on hold. Unemployment is expected to remain unchanged at 9.1%. All eyes will be on tomorrow's release of the FOMC minutes to gauge sentiment for further quantitative easing within the committee. Together with Bernanke's Jackson Hole speech from last Friday we should get a clearer view of the Fed's future plan of action.

EUR - The euro is modestly higher vs. the dollar to the start the week. The single currency rose above $1.45, breaking out of last week's narrow ranges between $1.43 - $1.45. Fed Chairman Bernanke's much anticipated speech last Friday provided no plans on further actions to boost the economy, leaving markets with little enthusiasm to pursue a new tack. Despite thinned summer conditions, several key Eurozone reports including Economic Sentiment, Inflation and the Purchasing Manager's Index ahead of Friday's all important US jobs report may awaken the euro from its comfortable summer ranges.

GBP - The pound fell against the EUR and the dollar last week as economic growth in the U.K. nearly came to a standstill. GDP cooled to 0.2 percent, down from 0.5 percent in the first quarter of the year. Total industrial production also dropped 1.6 percent, the lowest reading since the first quarter in 2009. As such, the markets are not only anticipating that the Bank of England will be on hold, there is speculation they will start a round of quantitative easing, which will certainly weigh on the pound.

JPY - Over the weekend, Finance Minister Noda was chosen to lead the Democratic Party of Japan and if the lower house approves his appointment tomorrow, he will serve as Japan's next Prime Minister. His experience as finance minister will prove important in both the economic rebuilding effort as well as on the currency front. USDJPY continues to trade within a fairly narrow range, a pattern likely to hold for the nearterm.

CAD - The CAD appreciated to its strongest levels in nearly a month as stocks and commodities rebounded after investors cut their expectations of another recession in the US, Canada's primary trading partner. Oil, Canada's main export, spiked nearly 2% to the highest prices in three weeks after a report out of the US showed personal spending jumping by 0.8% versus last month's 0.1% contraction. Investors will take note of Canadian GDP due on Wednesday, but the loonie's overall direction will continue to track investor risk appetite.

MXN - The MXN has bounced back after nearing its yearly low last week as rebounding stocks and commodities encouraged investors to assume riskier positions. However, BoM governor Augustin Carstens told reporters over the weekend that the central bank would consider the convenience of adjusting monetary policy if Mexico's growth outlook worsened. Expectations have thus increased that the central bank may cut interest rates from their record low 4.5% before the end of the year if they deem the current interest rate as unnecessarily restrictive. However, in the near term, the peso will remain relatively well supported after Fed Chairman Bernanke calmed investors' fears of slowed growth in the US, the destination for more than 80% of Mexican exports, at least for the time being.

AUD - The AUD begins the week at a three-week high against the USD ahead of economic data that is expected to show that the Australian economy is performing better than expected. The AUD has also found support in improving risk appetite as global stocks start the week in the black after positive commentary from Fed Chairman Bernanke late last week, and after a hurricane in the US had less of an economic impact than initially expected. With investor paring expectations that the global economy is bound to double dip into recession, bets that the RBA will cut interest have fallen to their lowest in nearly a month. However, futures markets are still pricing in nearly 1.25% of cuts to the RBA's benchmark rate over the next 12 months, and as such, further gains in the Aussie may be difficult to sustain.