USD: Fed Meeting Looms

As the Federal Reserve meeting looming, market activity is getting dampened, with US Treasury yields is little changed, hovering around 2.60%. The greenback is mostly lower against the majors after mixed trading on Monday.

Traders and analysts are weighing in on what to expect from the upcoming FOMC meeting that concludes on Wednesday. The central bank will leave its interest rates unchanged, confirming its “patient” approach to policymaking as the Federal Reserve has adopted a more dovish position since the start of 2019.

Markets will focus on the forecasts provided by policymakers in the so-called dot plot. It is expected that the Fed will signal just one hike in 2019 (or no hike at all) and one more in 2020 instead of forecasting two rate rises this year and one in 2020.

If so, the dollar could get under the additional downside pressure against major counterparts. But as a more dovish scenario has been mostly priced in already, the potential decline could be short-lived and limited.

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