FXStreet reports that analysts at TD Securities (TDS) offered a brief preview of Wednesday's key event risk – the latest FOMC policy decision – and see no change to the Funds rate.

“Today's FOMC meeting is, naturally, our main focus for the day. With the Fed expected to maintain the status quo, we are not looking for a significant FX market reaction, however. Here, the USD still remains the best of a bad lot particularly as FX is preoccupied with virus contagion fears.”

“We do not expect a major shift in Fed sentiment, but markets will focus on any remarks regarding the Fed balance sheet and the IOER increase. We expect a 5bp rise in the IOER rate to 1.60%, with the change downplayed as just a technical adjustment.”

“Tweaks to the FOMC statement are likely to be minor, with policy still described as "appropriate" but with officials also still in "monitor[ing]" mode, consistent with an easing bias.”

“Meanwhile, 1.0980 will be a crucial gateway to a more pronounced downside extension in EURUSD. There, the 1.0925/40 support zone would be the next objective for a move lower.”