Fed may raise inflationary pressure in U.S.

The U.S. Federal Reverve's silent for almost 10 year is going to take action today. Markets are quite sure about the rate hike, but they are waiting for how much the hike will be.

The rate hike will have a significant influence on FX market as it would cause USD to be firm against other currencies and thereby, increase the inflationary pressure in the economy. This rate hike is a special event for the FX market as it will increase currency movement in the market.

"Clearly, the Fed has most to gain if it fulfils market expectations as exactly as possible - so that USD exchange rates move as little as possible. And that would mean: to hike interest rates by 25bp today and to display a wait and see approach regarding the future rate path. By doing so it would keep all options open", argues Commerzbank.