At the start of a brand new trading week, the US dollar has slid down from its recent highs as investors cautiously look forward to the non-farm payrolls report for September due at the end of this week. At the time of writing, the US dollar index DXY is trading around 94.05.

The upcoming NFP report is expected to show that an increase of 460k jobs in the US during the month of September, which could support the Fed’s plans to continue with beginning the tapering of its monthly asset purchases in November. A reading below this figure could heighten worries of a possible delay and drive bearish moves in the greenback.

Meanwhile, leading commodity currencies AUD and NZD have eked out small gains against the USD in early trading ahead of their respective central bank meetings scheduled for this week. On Tuesday, we get to hear from the RBA on its monetary policy and expectations are for the bank to hold it unchanged. A recent Reuters poll expects the RBA to keep interest rates unchanged at least until 2024, giving the Australian economy adequate support to recover from the pandemic-inflicted damage.

The RBNZ, which will meet on Wednesday, is likely to announce a rate hike by 0.25%, but the markets have priced this in, so its effect on the NZD could be negligible. There is a 97% likelihood of a rate hike being announced at the upcoming meeting and a 96% chance that this will be followed by another rate hike next month as well.

The Euro has reclaimed the 1.16 level against the US dollar on Monday but its outlook remains weak amid the ECB’s decision to extend its dovish mood even as the Fed is beginning to look at pulling back on stimulus measures. The safe haven currency Japanese yen has also managed to post a small rebound after sliding to the lowest levels seen in 19 months.  The cautious mood towards the dollar has also lent some support to the GBP, which extends its gains from the previous session.