The US dollar is trading lower against the majority of G10 peers less than an hour ahead of the key FOMC decision (7:00 pm BST). Market consensus calls for a 50 basis point rate hike - the first Fed rate hike of such magnitude since the dot-com bubble. Such a move was well communicated by a bulk of Fed members and surprise looks unlikely. However, because of that any surprise may be a big volatility trigger for USD as well as US indices. Apart from delivering a big rate hike, FOMC is also expected to announce the launch of quantitative tightening. In this case attention will be paid to details, like pace of balance sheet run-off.
EURUSD is trading higher ahead of the decision. Main currency pair is slowly approaching the upper limit of a recent trading range (1.0490-1.0570). As the range is a rather narrow one, a chance for a post-FOMC breakout remains high. However, the direction of the breakout remains to be seen.
Source: xStation5
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