ING: The Fed's dot plot won't change and won't be surprised by the dollar's strength

Analysts at ING International said that the Fed’s dot plot is expected to remain unchanged this month, but a hawkish bias looks more likely than a dovish. The potential dot plot correction risk suggests some upside risks to the USD, but cautious optimism about softer inflation suggests that the USD will weaken. In our view, the Fed may not provide enough reason for investors to deviate significantly from the 75bp rate cut expectations by the end of the year. We wouldn’t be surprised if the USD strengthens modestly above 104 after the FOMC announcement.

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