The US dollar yesterday got wrapped up in the idea of a hawkish Fed but today it’s given a smidge of that back as we count down to the FOMC at 2 pm ET.
The euro has made some headway in the past few hours, rising to 1.0684 from a low of 1.0650. It’s fared better than most over the past two days.
EURUSD 10 mins
In contrast, the Australian dollar was beaten up yesterday and has only recouped 12 pips today.
I’m inclined to be USD-negative through the Fed. The market often gets wrapped up in the idea of a hawkish shift but going all the way back to Bernanke, it’s rare that the fears materialized. Instead, the Fed takes a patient stance on rate hikes and I expect that again today. I think so long as Powell doesn’t squarely put rate hikes on the table, the dollar will slacken further.
Before then, we get data on ISM manufacturing, JOLTS and construction spending: all at 10 am ET.