According to analysts at Danske Bank, majors will be awaiting the key Fed decision this Wednesday as the market has priced the Fed notably more dovishly recently, which suggests that risks are tilted towards a hawkish surprise.
Key Quotes
“There is a key risk that the FOMC could lower rate expectations (aka the dots) further out. For USD, it will thus be key whether Fed Chair Jerome Powell and co come across as (a) adamant to get to neutral or (b) cautious in not making policy contractionary. The former is our base case, which should be USD supportive near term.”
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