Status Quo ahead of the Fed - The dollar......>

FOREX: Status Quo ahead of the Fed

- The dollar has extended minor weakness overnight as most month-end models

continue to point towards a USD selling bias into the month-end fix. The USD

index is yet to slip through the Tuesday lows just yet, but is well within range

and a break through 99.45 opens the 50-dma at 99.324.

- The pullback in the dollar is helping flatter antipodean FX, with AUD and NZD

on the top of the G10 board so far. Equities are generally higher, but gains are

minimal with markets largely treading water. This is reflected in lower vols

across the board for both DM and EMFX so far Wednesday.

- US advance flash GDP is the data highlight Wednesday, with the numbers

expected to show the first signs of COVID-19 inspired weakness. Analysts

forecast an annualized drop of around 4% for Q1. From then on, focus turns to

the FOMC decision. The Fed aren't expected to make any considerable changes to

policy as April is seen as a transition meeting following an unprecedented

whirlwind of emergency activity and ahead of the next Summary of Economic

Projections in June / policy framework review.