US Tapering, the US Dollar and Wider Currency Markets: Likely Impacts of Today's Big Event

The Pound Sterling Live brings you the latest views on the matter:

• A morning brief from Swissquote says:

"GBP/USD bulls were capped by the upper-BB (1.5697). The FOMC minutes should trigger volatility in euro & sterling markets later in the session. Risk is two-sided."

• Michael van Dulken at Accendo Markets says:

"In focus today, as if anything could garner more attention than Fed minutes, where more clues well be sought on taper timing, we caution against expecting too much given that these are from July and much water has since passed under the macro data bridge.

"Latest consensus is 65% expecting a September tapering to $75bn from current $85bn."

• Kathy Lien at BK Asset Management concentrates on the likely impact on the US Dollar saying:

"We along with the financial market community will be looking for 2 specific details in today's release.

"The first is the level of conviction for easing in September. Most Federal Reserve Presidents that we have heard from support some type of action over the next 3 months with more leaning towards a sooner vs. later move.

"If the minutes emphasise the progress made in the U.S. economy and the need to act quickly, the dollar could resume its rise as yields extend higher.  

"However if the minutes contain an overall air of caution with more members wanting to wait for further improvements before changes are made, the dollar could fall sharply as U.S. yields give up recent gains.  

"We will also be looking for details on which assets the Fed will taper.  

"The choice is between Treasuries and mortgage backed securities and if the Fed opts for only one and it would be Treasuries, the dollar should slide as this would represent a smaller initial move.  

"If the minutes reveal plans to taper both, it would be positive for the dollar because it gives hope for a more aggressive reduction."

• Lloyds Bank Research say:

"Today’s publication of July’s FOMC meeting minutes provides the key focus. These will be scanned for further clues on the Federal Reserve’s tapering strategy.

"The debate for markets has shifted recently to now focus more on how much the Fed will taper in September rather than whether it will happen. The consensus is for around $15-20bn."