MUFG Research discusses its expectations for this week's FOMC policy meeting and likes short EUR/USD into the meeting.
"Fed Chair Powell will have a difficult task this week in dampening down the enthusiasm for selling UST bonds. The scale of GDP growth will be underlined by the Fed’s own revisions. Our sense is that Powell will focus on employment, not GDP growth, in order to justify an ultra-dovish stance," MUFG notes.
"Overall, we think Powell has a difficult task altering the momentum of US rates and the US dollar. We established a short EUR/USD trade idea on Friday and for now we maintain a view of a further strengthening of the dollar over the short-term," MUFG adds.