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| Possible 50 bps Hike from Fed Could Boost Dollar, says ING |
Economists at ING have analyzed the potential impact of Wednesday's Federal Reserve meeting on the US Dollar. The Fed is focused on inflation and may opt to hike by 25 bps if conditions allow.
According to ING, if the Fed surprises with an unlikely 50 bps hike, it could prove very bullish for the Dollar. In that case, the EUR/USD pair could even trade below the big support level of 1.05.
However, a pause in rates could see the Dollar weaken slightly, although this would be understandable given the recent bank failures. ING does not anticipate too much volatility if conditions allow for a 25 bps hike and the dot plots do not reveal any surprises.
As always, the markets will be closely watching for any changes to the Fed's approach to monetary policy and how these could impact the US Dollar.
