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Talking Points:

- The DXY Index has had a quiet week thus far as traders have been awaiting the results of the August FOMC meeting.

- Without a new Summary of Economic Projections or a press conference for Fed Chair Powell, there is little reason to believe that policy will be changing.

- See the full DailyFX Webinar Calendar for upcoming strategy sessions pertaining to the August FOMC and BOE meetings.

Looking for longer-term forecasts on the US Dollar? Check out the DailyFX Trading Guides.

The US Dollar (via the DXY Index) has been treading water this week despite the deluge of economic data hitting the news wires from all corners of the world. Much attention remains on the Trump adminstration's actions in the unfolding global trade war, and traders have been duly waiting for the results of the Federal Reserve's July 31 to August 1 FOMC meeting.

As far as meetings go, the August FOMC meeting could turn out to be one of the duller central bank rate decisions in 2018. Rates markets are pricing in a 0% chance of a 25-bps rate hike today, effectively making today's meeting a placeholder for future gatherings.

Fed Rate Hike Expections (August 1, 2018) (Table 1)

Preview for August FOMC Meeting and Outlook for US Dollar

Indeed, according to Fed funds futures, rates markets are pricing in at least an 80% chance of 25-bps move next month. But this shouldn't be a surprise, as market participants have been classically conditioned by policymakers at the major central banks to only anticipate policy changes when new forecasts are in hand and the head of the central bank is afforded a press conference: August will yield neither of these; but September will provide both new forecasts and a podium from which Fed Chair Jerome Powell can pontificate.

Without a new Summary of Economic Projections, that means all of the salient information regarding policy decision making will be in the sole policy statement released at 14 EDT/18 GMT. But given the lack of change in either US growth or inflation expectations since the FOMC last met on June 13, it seems highlydoubtful that the language used will shift materially in one direction.

In sum, traders hoping for today's FOMC meeting to be a significant enough catalyst to shake the US Dollar out of its range trading stupor may ultimately walk away disappointed by price action.

DXY Index Price Chart: Daily Timeframe (July 2017 to July 2018) (Chart 1)

Preview for August FOMC Meeting and Outlook for US Dollar

It remains the case that there seems little chance that the DXY Index's recent consolidation in the ascending triangle give way in either direction around the FOMC meeting tomorrow. Until a close above 95.53 (the June 21 bearish key reversal and the June 27 to 29 evening doji star candle cluster highs) or below 93.19 (the June 14 bullish outside engulfing bar low) is achieved, it's best to wait for a clearly defined break in price.

Read more: EUR/USD Gains Weigh on DXY Index; Sideways Price Action Eyed

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--- Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX