RBS lays out three potential scenarios for today’s FOMC statements highlighting the related FX strategies in each of these 3 scenarios:
1. Neutral (maintain dovish) case:
This is our base case, where the Fed maintains the dovish approach established at the March FOMC and reinforced by Yellen’s March 29th speech to the New York Economic Club and releases a statement that makes no discernable effort to pull forward interest rate expectations. The statement may recognize that international risks have "diminished" or describe global developments as something that the committee will be "monitoring" as opposed to actively "posing risks", Otherwise the statement remains relatively unchanged.
