TD Research discusses its expectations for today's FOMC policy meeting. TD expects EUR/USD around 1.1270 and USD/JPY around 107.10 around the meeting.
"We don't expect any major new policy announcements, but we expect the chair to start prepping markets for the adoption of forward guidance tied to a minimum for inflation in the context of AIT. Updated projections will probably show inflation falling further below 2%, and the funds rate near 0%, through at least end-2022," TD notes.
"We expect greater consolidation ahead of the Fed meeting than after. However, the tone of risk assets will dominate as correlations remain firm. Biased to USDJPY downside; 107.10 is key support," TD adds.