Dollar Trades Narrowly Mixed Ahead of FOMC Meeting

The US Dollar is trading narrowly mixed to softer ahead of the Federal Open Market Committee (FOMC) meeting, according to Scotiabank strategists Shaun Osborne and Eric Theoret. They note that swaps are pricing a modest chance of a rate hike, but see this risk as lower than what's conventionally indicated.

The analysts argue that policy is unlikely to change until the Federal Reserve's operating reviews are complete. If the Fed holds and provides no guidance, they expect the US Dollar to ease. A loss in the DXY below 101.10 would signal further short-term losses for the USD.