Next week, markets will undoubtedly focus on two key events - the FOMC decision and release of the Non-Farm Payrolls report. The Fed meeting will take place earlier, on Wednesday, that’s why the relevance of NFP report will be much lower than usual.

Rising inflation around the world is forcing central banks to cut stimulus and, in the case of emerging economies, rather aggressively raise rates. The Fed is expected to start with reducing monthly asset purchases (QE) and is expected to announce this decision next week. The key uncertainty is the pace of QE tapering: if the announced pace is higher than the market expects, then Treasury interest rates are likely to react upward, and the dollar may strengthen against other currencies. The moderate pace of tapering is unlikely to disappoint the dollar, as the Fed's intention to announce the start of QE tapering in November has already been priced in by the market. Thus, the risks for the dollar are shifted towards continuation of the rally.

The Non-Farm Payrolls report will be released next Friday and, as mentioned above, will most likely have a negligible impact on the market, since labor statistics are primarily interesting because the Fed is guided by the dynamics of employment in making decisions on monetary policy. Since the Fed's stance will be known already on Wednesday, the NFP release will likely receive tepid market response.

It is also worth watching next week for the events such as the Australian Central Bank's monetary policy decision, the Bank of England's interest rate decision, and the ADP US employment change report on Wednesday.