Don’t expect much from FOMC today. As a matter of fact, we at FxWirePro, won’t be surprised if the committee keeps the most parts of the previous statement intact other than adding some Brexit concerns to it. However, there has been some indications in the recent communications that there could be debate over the future outlook.

• The hawkish camp is likely to debate that the Fed should focus on the economy of the United States, which can handle a bit higher rates pointing to the fact that Brexit could extend for years.
• The dove is likely to point out the persistent weakness in inflation reading and call for a wait and watch approach for more data from the UK and the US.

The focus will be on the followings.

• Policy decision –Most of the analysts including us at FxWirePro and economists expect Fed to hold interest rates steady at the current level of 0.25-0.5%. The market is pricing 100% chance of no hike today.
   
• How divided is the board – While December hike was unanimous, from March Kansas City Fed president Esther George called for a hike from March. She dropped her rate hike call in the June meeting but likely to call again at this meeting. Focus will be whether she remains the lone dissenter or anybody else joins in. More than two hawks would be bullish for the dollar.
   
• Fed’s assessment of Brexit risks – Fed’s Brexit warnings would be closely watched. However, Fed is likely to say that current data isn’t enough.

Riding on a better than expected economic outcome, rate hike expectations from the Fed has jumped from 12 percent at the beginning of the month to around 50 percent as of now. Today will be the key test whether that expectation rises or falters.

The dollar index is currently trading at 97.24, up 0.07 percent.