USD’s attempt to halt its downtrend suffered a major blow after Friday’s massive miss in the nonfarm payrolls estimate. There is still hope for a near-term rebound, however, as inflation and retail sales numbers are coming up next week. EUR has shot above $1.21 after the NFP report but GBP is more cautious.

What to watch:

• The Bank of England surprised markets by announcing it will reduce its weekly bond purchases, although it is keeping its QE size unchanged. GBP barely budged as investors are treading carefully ahead of the Scottish election results due Saturday. A strong showing for pro-independence parties could cast a cloud over the UK’s brightening economic outlook.
• CPI and retail sales data will be the highlights in the United States next week. The annual rise in the consumer price index is expected to hit a 10-year high of 3.6%. But after the shock jobs numbers, it might take a lot more to revive USD.
• The rally in commodities is showing no sign of easing, with copper (HGCOP) and iron ore climbing to fresh highs, though they haven’t provided much of a boost to AUD.
• In equities, the earnings season will continue with Disney and Intel reporting their results.
• The overall stock market will continue to be driven by expectations around when the Fed might scale back its gigantic QE programme, which doesn't seem to be anytime soon judging by the latest disappointing US jobs data.