Bank of America Global Research discusses USD outlook around tomorrow's FOMC policy meeting.
"USD risks look skewed to the upside through Wednesday's Fed meeting, in our view. Despite ebbing global risk aversion over the last few days, the dollar has remained remarkably resilient despite evidence of FX risk premium on some pairs, suggesting that liquidation of persistently-short USD positioning remains an ongoing theme," BofA notes.
"We expect the Fed to lay the groundwork for an upcoming taper announcement at this meeting, serving to confirm the reality of US monetary policy divergence. The need for Fed normalization is likely to be punctuated by strong US GDP and core PCE data, as our economists expect," BofA adds/