The Dollar enters FOMC day after having shown some resilience over the past few sessions. A push-back against a pivot and rate-cut speculation could hit risk assets and lift the Dollar, economists at ING report.

Chair Powell may see little interest in sounding materially less hawkish just yet

“We are in the camp of expecting Powell to maintain his hawkish rhetoric despite this appearing less appropriate given the backdrop of slowing inflation and growth. This outcome may ultimately have some negative implications for risk and give the Dollar some support, as bets on a pivot, and potentially on rate cuts, are scaled back. Any communication missteps or deliberate dovish tilts, on the other hand, can surely revive that Dollar bear trend that appears to have halted lately.”

“We also have some US data to watch today: ISM manufacturing, ADP payrolls and JOLTS jobs openings. Substantial surprises on those releases are likely needed to drive major Dollar moves ahead of such a big event like the FOMC.”

See – Fed Preview: Forecasts from 16 major banks, dialing down rate hike to 25 bps