Today finally there is almost certainty that US Federal Reserve will hike rates by 25 basis points, for first time in almost a decade and officially ending long seven years of accommodation. FED however has indicated that it will hike rates a much more gradual pace compared to prior cycles, however FED is likely to be more data dependent than deliberately gradual.

Key highlights for today -

Interest rate decision - Policy is likely to be announced at 19:00 GMT. General expectation is FED will hike rates by 25 basis points and keep it in target range of 25 to 50 basis points. However some expectations (though small) are of lower than 25 basis points, which we at FxWirePro, strongly disagree with.

Projection materials - FED will also release a series of projections by participants. Since rate hike is almost priced in, FED projection would be more vital than actual rate hike. Key focus will be on dot plot from FED, which last time, when released in September, suggested four rate hikes in 2016, totaling 100 basis points. Since unemployment rate is already close to long term normal level, next focus will be on inflation projection. As per September material, inflation is likely to be 0.4% in 2015, 1.7% in 2016, 1.8% in 2017 and 2% by 2018. FED might drop its projection graph of appropriate timing.

Yellen press conference - FED chair Janet Yellen will be speaking at 19:30 GMT and it will be most vital among all the events. She is most likely to try to soothe the market, if interest rate is hiked. However question answer session need to be closely watched for further cues on policy.

We expect Dollar to gain immediately if FED do hike rates, however a decline in Dollar is most likely over profit booking.

Dollar index is currently trading at 98.2, up 0.05% for the day.