Earlier this week, Goldman Sachs cut its estimate for the third time this month for 2021 GDP growth in the US to 5.7% from 6.2%. Rising COVID cases will most likely lead to another round of restrictions, crippling economic growth worldwide.
Later in the session, the Bank of Canada is due to decide about monetary policy. However, the BoC isn’t expected to change monetary policy at this meeting, particularly after disappointing second-quarter GDP data. Nevertheless, investors will look for clues in its following statement, most likely causing volatility in the USDCAD pair.
Moreover, the Fed's Beige Book will be released. The Beige Book reports on the current US economic situation. Interviews with key business contacts, economists, market experts, and other sources are gathered by each of the 12 Federal Reserve Districts. The survey gives a picture of the overall US economic growth.
In the FX, the dollar is trying to recover from Friday's sell-off, but the overall situation still favors selling any rallies as the EURUSD pair remains above 1.18. The USDJPY pair rose above 110 amid rising US yields, but traders seem ready to sell the rally.