The market’s sentiment about US dollar remains very bearish. Now the focus has switched to the FOMC meeting and the following Fed’s press conference.

Currency strategists at Scotia Capital note that Bernanke may potentially say a lot to support the greenback. In their view, it’s important to watch the central bank’s forecasts, especially on inflation.

Never the less, the specialists don’t think that the Federal Reserve will deviate from its extremely loose monetary policy taking into account dovish comments from the Fed’s officials during the last few weeks.

According to Scotia Capital, US interest rates will remain at the current levels between 0% and 0.25% until the first quarter of 2012. The economists expect US currency to fall to $1.50 per euro.

Analysts at Deutsche Bank keep favoring the Australian dollar versus its US counterpart. According to their comparative analysis of current accounts and other fundamentals, US dollar is much more overvalued than Aussie.



Chart. Daily EUR/USD