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Less-dovish Fed priced in by markets and USD after recent gains - TD Securities

FXStreet (Łódź) - The TD Securities team of analysts believe that the Fed could adjust its forward guidance at today's meeting, removing the 'considerable time' reference, but that the move is already priced in by markets.

Key quotes

"This may limit how much the USD can gain and leave it vulnerable to profit-taking later—a classic-buy-the-rumour, sell-the-fact type reaction."

"In the event of a dovish surprise, pressure for a USD correction should manifest itself more quickly."

"We think there may be some cracks appearing in the USD bull trend, which point to the risk of a short-term consolidation in recent gains at least."

"Two developments suggest this may be a growing risk."

"Firstly the EURUSD’s indifference to EUR-negative comments from the ECB last week as well as contrasting data flow from the Eurozone and US both suggest bear momentum is waning somewhat."

"And secondly, the fact commodity prices, which have been hard-pressed in the wake of the recent USD rally, are starting to show signs of stabilizing or improving—this week’s 5% pop in WTI crude being one example—may be a precursor to a drop back in the USD. "

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