We'll find out what the Fed has to say this week, but, as summarized nicely by the Financial Times, there was plenty of activity -- or thinking about activity -- in the rest of the world's central banks this past week:
Interest rate expectations have driven the foreign exchange markets this week, with the euro falling more than 1 per cent against the dollar even though the European Central Bank has still to send a clear signal that it is ready to cut.
The first catalyst for the euro’s move lower was Tuesday’s aggressive 50-basis-point cut by Sweden’s Riksbank to 1.5 per cent. Swedish gross domestic product growth has been revised down sharply for the year and with inflation well below its 2 per cent target, the central bank considered there was plenty of room for the move...
The second catalyst for the euro’s decline was the minutes from the Bank of England’s last monetary policy committee meeting published on Wednesday. Two of the nine members – Charles Bean and Marian Bell – voted for a quarter-point rate cut to “obviate” the need of a larger move later should any slowdown become entrenched.
Not all of the buzz came from Europe:
The prospect of a renminbi revaluation came back into focus on Thursday after John Snow, US Treasury secretary, said he believed China was ready to move to a more flexible exchange rate. Mr Snow suggested that diplomatic efforts had laid the groundwork for currency flexibility and that China was now ready and “should move without delay in a manner and magnitude that is reflective of market conditions”.
The Japanese yen, one of the currencies most exposed to the prospect of renminbi revaluation, ended the week, after some volatile sessions, little changed at Y109.20 against the dollar.
On related matters:
Edward Hugh -- so prolific one blog can't contain him -- reviews Italy's travails here, here, and here, and reports out on the Riksbank rate cut here.