Credit Suisse discusses its expectations for today's FOMC policy meeting.
"Our own, more cynical, strategy base case is a 50% chance the Fed keeps most things as they are, with just a one-hike tilt for the median 2023 dot, and that Powell makes only the most modest hint of the possibility of tapering talk starting soon," CS notes.
"What does all this mean for the USD? The market has taken a relatively cautious stance coming into this week, closing out greenback shorts and taking profits on some Q2 favourites. But beyond these short-term tactical adjustments, strategically the bulk of investors appear to be betting on the idea that this month’s FOMC will not be a game changer for messaging either on when tapering discussions will start or in terms of when / how much the Fed will hike rates. This suggests that the path to a much stronger USD after the FOMC probably lies in the Fed validating the most hawkish expectations," CS adds.