FXStreet (Delhi) – Brian Daingerfield, FX Trading Strategist at RBS, suggests that with no press conference scheduled and no update to the Fed’s projections for growth, inflation, or ‘dots’, the bar was already set fairly high for any change in policy. Key Quotes “International developments and domestic data released since the September decision are unlikely to have increased the Fed’s sense of “reasonable confidence” that inflation will rise over time.” “Market participants currently price the first FOMC rate hike out of June 2016 and a below 50% chance of a rate hike in December. To validate that pricing, the market may be looking for a clear signal that policy expectations have shifted further in the dovish direction.” “Recent action by other major central banks may heighten expectations for an FOMC dovish lean. In China, the PBOC lowered the deposit and lending rates ahead of the Communist Party Plenum this week. The ECB, meanwhile, gave a very clear signal that it is likely to expand policy easing at its next meeting in December. While we think Japan’s BoJ will ultimately leave rates unchanged this week, there is a chance the BoJ will also step up easing as soon as this week.” “We see little scope for the Fed to introduce any purely “hawkish” changes in its statement given the evolution of the data. As a result, below we list dovish risks to the statement. In each case, a dovish outcome would involve a material change to the statement, while a “hawkish” outcome lies more in the language being unaltered rather than a material hawkish change in the language.” “The fact that the FOMC will release only its post-decision FOMC statement severely limits the Fed’s ability to communicate a change in policy outlook. In this sense, less news is good news for the USD – the fewer changes the FOMC makes, the more positive for the USD at the margin. But any USD gains inspired by an unchanged statement may prove fleeting, as participants quickly look to the commentary from FOMC officials and the minutes following the decision for a more detailed look at how the Fed’s views on the outlook have evolved.” For more information, read our latest forex news.