MUFG Research discusses the Fed rate outlook.

"The decision to hike in September now looks like a very close call and a lot must go the same way for the Fed to remain on hold. The decision to hike, if it happens, is unlikely to be a gamechanger for the dollar. Developments abroad also point to other central banks being more hawkish than we initially expected," MUFG notes.

"A third rate hike from the ECB is becoming a bigger risk, a hike by the BoE, the RBA and Norges bank (all not fully priced) are possible either in September or by year-end and hence rate spreads are unlikely to move dramatically in favour of the dollar. We’d also assume it more likely than not that a Fed hike could prove a one-off based on our view of a decline in energy prices, weak jobs and CPI," MUFG adds.