MUFG Research discusses its expectations for the USD outlook around today's FOMC policy meeting. 

"The OIS market implies 52bps of tightening is priced for this evening and we believe along with most in the market that the Fed will deliver a 50bp rate increase. Dollar direction will therefore be determined by other less predictable factors. The FOMC seems likely to vote unanimously to hike by 50bps," MUFG notes. 

"To what extent Chair Powell is willing to endorse current market pricing will likely play a key role in US dollar reaction. There seems a high likelihood that Powell will be more than willing at this juncture to endorse market pricing which should result in yields moving further higher over the short-term. Leveraged Funds are long US dollars but there remains scope for further buying despite the DXY index reaching levels not seen since 2002," MUFG adds.