ANZ Research previews this week's July FOMC meeting.

"OIS now reflect 45bp of Fed hikes in 2026, with September fully priced for 25bp. But if oil prices continue to rise, the view that peak Fed hawkishness is behind us will be tested, leaving the DXY vulnerable to a retest of the year-to-date high near 101.80. The last FOMC meeting showed a still-hawkish Fed. Half the committee projected a 2026 hike, with some pencilling in two," ANZ notes.

"Our base case for the upcoming meeting is for a hawkish hold. We have a positive USD bias around the FOMC meeting, and in the event there is a surprise rate hike, this will likely see the DXY breach 102, with upside risk," ANZ adds.