At the start of a brand new trading week, the US dollar is strengthening against other leading currencies as hopes rise once again that the Fed could announce a possible timeline for tapering asset purchases at its upcoming meeting soon. At the time of writing, the US dollar index DXY is trading at around 93.33.

There is a cautious optimism among investors that the recent positive economic data releases from the US could convince Fed’s policymakers to start the tapering process soon. In addition to this sentiment, the US dollar is also receiving some support from rising uncertainty in equity markets, which has strengthened its safe haven appeal among investors lately.

The bullish moves in the reserve currency have also come on the back of rising US Treasury yields, especially the benchmark 10-year US Treasury yields which have gained for the fourth consecutive week. This further raises the likelihood of a hawkish mood among Fed officials in the latest meeting scheduled for this week.

Later this week, we also get to hear from the BOE with most investors expecting the central bank to keep its monetary policy steady. However, if policymakers sound hawkish or press for tapering of asset purchases in Britain, we could see some bullish moves in the Sterling towards the end of this week.

The BOJ is also scheduled to hold its meeting on Wednesday but markets expect no change in its outlook. Meanwhile, Norway’s central bank – Norges Bank, is also slated to hold its meeting this week and could become the first among G10 economies to announce a rate hike in the upcoming meeting.