Petr Krpata, an FX strategist at ING, notes that the key focus of the day is the FOMC meeting.

"Following the stunning US May employment report, there is a degree of uncertainty whether the Federal Reserve considers the improvement in data as an opportunity to signal a less loose monetary policy and thus take the liquidity punchbowl away from markets. We don’t think so."

"According to our economists Fed preview, we expect the Fed to err on the side of caution given the uncertainty about the recovery, with the central bank unlikely rocking the boat for risk assets."

"While the new set of economic forecasts is published, given the huge amount of uncertainty the Fed is likely to refrain from, firm forward guidance. The potential indication of the 2022 hike in the new forecast is more likely to do with dispelling the odds of negative rates rather than the potential for a meaningful policy reversal."

"All this should keep the dollar soft and further help to facilitate the genal widespread USD bear trend as the mix of the Fed’s accommodative policy stance, the gradual recovery in the global economy and the stretched USD valuation weigh on the dollar in the months to come."