Analysts at Scotiabank explained that the 2:00pm EST FOMC statement should reaffirm the Fed’s anticipated improvement in the inflation outlook and reintroduce the ‘balanced’ assessment that was removed in January. Key Quotes: "The forecast and ‘dots’ will be in focus, likely moderating the Fed’s anticipated path relative to that delivered in December, however it will still likely maintain a normalization path that is much tighter than that currently priced in fed funds futures With regards to the 2:30pm EST press conference, we look to a steady tone from Fed Chair Yellen favoring a gradual, data dependent path. In terms of risk to specific currencies, we look to sentiment and positioning, noting the sizeable bullish CFTC positions in both AUD and JPY leaving them most vulnerable to a renewed rally in the broader USD. EUR positioning also feels relatively light considering the mediumterm policy divergence that is likely to be reinforced by Wednesday’s events." For more information, read our latest forex news.