The Federal may well match market expectations and hike by 75 bps today. Economists at ING cannot exclude some "sell-the-fact" reaction in the dollar, but any correction should be very short-lived, and the overall outcome should be USD-positive beyond the very short-term.

75 bps by the Fed today

“Our base case scenario is a 75 bps hike today. Markets are fully pricing in such a scenario, and the updated set of projections – in particular the dot plots – will be key in driving the market reaction.”

“We expect the outcome of today’s meeting to be overall positive for the dollar's short-term outlook. This is not to say that the dollar’s immediate reaction will necessarily be positive today, as there are indeed multiple scenarios where the Fed may fall short of expectations; by all means, some ‘sell-the-fact’ dollar correction today after a big rally is possible.”

“We think any dollar correction will be quite short-lived, as we deem it unlikely that investors will turn materially less bullish on USD in an environment of accelerating Fed tightening, sharply rising Treasury yields (and inverted yield curve), the prospect of a global slowdown and equities in bear-market territory.”

See – Fed Preview: Forecasts from 12 major banks, increasing bets of a 75 bps rate hike