US DOLLAR ENTERS FIFTH DAY OF WINNING STREAK AHEAD OF FED DECISION

• The US Dollar advances relentlessly for a fifth consecutive day. 
• Traders brace for the Fed decision, with Powell and new economic projections on the docket. 
• The US Dollar Index snaps above 104.00, continuing its bullish narrative. 

The US Dollar (USD) is tearing down the 104.00 level on Wednesday after it briefly failed to do so on Tuesday in the Bank of Japan aftermath. All eyes are on the US, with the US Federal Reserve (Fed) set to issue its monetary policy statement followed by a speech and comments from Fed’s Chairman Jerome Powell. the crucial element will be the so-called dot plot (or Philip’s Curve), which should give markets more insights on whether three or only two cuts are expected for this year. 

In the dot plot, each voting member of the Fed’s Federal Open Market Committee (FOMC) will pencil in his or her view on where rates will be in the current year, one year ahead, and in the longer term. Markets have been pushing for a stronger US Dollar these past few days amid increasing speculation that the Fed might signal fewer than three rate cuts for this year. The Dot Plot release this evening will give markets confirmation on this, and could see some US Dollar weakness in case forecasts of three cuts are still on the table.