Bank of America Global Research previews this week's June FOMC meeting.

This week's FOMC is one of the more highly anticipated meetings in some time. Not only is it the first under Chair Warsh, but it comes at a time when there's a reasonable case that the Fed's easing bias is likely to be removed. 

"In the FX market, there are 2-way risks to the USD going into the meeting. On one hand, a hawkish surprise seems more likely than a dovish one, given the contrast of the actual data flow with the already entrenched expectations of Warsh's dovish bias. This scenario could serve to further open the top end of Fed pricing distribution and allow the USD to more meaningfully test the top end of its well-established range.

On the other hand, despite Warsh's previously expressed views, the market is already priced for a full hike this year, and nearly an additional one next year. Should Warsh double-down on dovish arguments (see below), and/or if the SEP were to reflect a reluctance of the broader committee to lean hawkish, the USD could retreat further into its range," BofA adds.