ANZ Research discusses its expectations for next week's Fed and ECB policy meetings.

"In the week ahead, we have policy meetings for the Fed, ECB and RBA as well as the BoJ later today. We expect the Fed will raise rates by 25bp next week to bring the federal funds rate to 5.25%, followed by another 25bp increase in June. Likewise, we see the ECB enacting a 50bp lift next week, with a terminal rate of 4% to be reached by June this year. With a May hike close to fully priced for the FOMC and more than fully priced for the ECB, FX price action will likely come from the interpretation of post-meeting press conferences," ANZ notes. 

"The DXY is unlikely to find any lasting support after the FOMC, as post-FOMC gains in the USD have gradually become smaller and less permanent as the current tightening cycle nears terminal and the Fed becomes more data dependent. While hawkish expectations from the ECB have helped support the EUR in recent months, we think this support will fade as terminal approaches. However, in the short term, the EUR can still benefit from an ECB hike next week. Going forward a weaker DXY will see tailwinds overpower headwinds for the EUR and G10 FX more broadly," ANZ adds.