Barring clearly positive developments in the banking sphere, economists at ING suspect the approaching Fed announcement could favour some defensive Dollar positions today.

FOMC risk event draws closer

“What is undoubtful is that tomorrow’s rate announcement will be a big risk event, and markets are only pricing in a 60% chance of a hike.”

“From an FX perspective, we wouldn’t be surprised to see the Dollar – which fell yesterday as risk sentiment rebounded – find some support into the FOMC announcement as markets turn more defensive and potentially factor in a greater risk of a hawkish scenario.”