There is quite a big contrast between the political situation in Japan and Germany and investors are looking to play on that contrast.

As well as hints from Asian authorities that they are going to diversify, we now have the U.S. acknowledging it. It's going to put the dollar under a bit of pressure.

Failure to meet market expectations here will reinforce the market perception that the peak in US rates is clear, putting the dollar under renewed pressure.

We will get a test of the $1.10 low.

The market is still concerned about the interest rate and whether the Fed is on a possible pause.

The message from officials is that the impact from Katrina will be limited.