Fed: Uncertainty about median rate levels to support the dollar for now – Commerzbank

The Fed rate decision next week will be the next major event for the FX market. In the opinion of economists at Commerzbank, uncertainty continues to benefit the dollar.

Significant upward revision to the rate projections is inevitable

“A significant upward revision to the Fed central bankers' rate projections next week is inevitable – regardless of whether 75 or 100 bps occurs.”

“The main uncertainty is whether the Fed then expects higher median rate levels than the market is currently pricing in (roughly 4.5%). This uncertainty is likely to support the dollar for now.”