USD edges lower as markets await the Fed policy decision. Although the greenback could strengthen following Federal Reserve's policy announcements, the gains are unlikely to be significant, economists at Scotiabank report.

Main issue for USD is how much the policy statement and press conference shift terminal rate expectations 

“There is perhaps some risk that markets are overestimating how dovish Powell may sound today which might drive some USD gains in the short run.” 

“The main issue for the USD is perhaps how much the policy statement and press conference shift terminal rate expectations (and market pricing for late-year rate cuts); it seems hard to escape from the idea that the Fed’s rate cycle is looking very mature and that should limit the Dollar’s ability to strengthen significantly.” 

“I think the USD emerges a bit softer still from the Fed decision but it may be bumpy ride in the short run.”