The macro outlook should put US rate hikes on the horizon

Greek issues have receded from the headlines, and market focus is expected to return to core worries around the broader global macro outlook. 

"In particular,the USD is expected to move higher as the July 29th FOMC statement indicated that US monetary policymakers were still seeing progress towards conditions supporting that first Fed rate hike in September", says Bank of America. 

There is contrast between a Federal Reserve hiking rates, compared to most central banks around the world cutting rates or executing unconventional easing, to be USD-positive. Of course, such Fed action depends crucially on further improvement in the growth picture, especially the labor market. 

The data flow has been somewhat mixed, especially in terms of wage growth. Meanwhile, the ECB continues to fight disinflation concerns with mixed success through their current quantitative easing program.

China's slowdown continues to roil markets, as seen in the move in Chinese equities. Markets are increasingly concerned about stabilization in growth, and weakening activity has particularly hit commodity-focused currencies such as AUD. 

"While a more limited negative impact from equities to the economy is still expected, the key factor will be government credibility going forward in terms of restoring confidence", added Bank of America.