What do bank analysts expect ahead of the FOMC?
Danske: The Federal Reserve’s meeting will be neutral for USD, but the risks are that USD will strengthen. The near-term outlook for EUR/USD is negative.
Bank of America Merrill Lynch: in the absence of big changes in the Fed’s statement, the effect on Forex majors will me minimal. The minutes of today’s FOMC meeting, which will be released on August 17, will be much more important for the market players as they will contain more information about the Fed’s intentions.
Deutsche Bank: The Fed’s language will become more constructive. USD may appreciate by 5% in the coming weeks and months against the currencies of America’s main trading partners.
BTMU: There will be very modest positive changes in the Fed’s communication.
Societe Generale: Some acknowledgement of the improved economic backdrop is likely in the statement and the market will go on slowly raising the odds of a 2016 rate hike.