ING believes the likelihood of a 25 basis point rate cut by the Federal Reserve is slightly higher, but will send dovish signals while remaining cautious. This might include some committee members voting for a 50 basis point cut, and Powell opening the door for larger rate cuts in the future. A 25 basis point cut could lead to a rise in the dollar, however, if our expectations of a dovish press conference from Powell are correct, the dollar may struggle to sustain gains in the short term. A 50 basis point cut would trigger panic, weakening the dollar. Powell would then need to indicate that the 50 basis point cut is not a "panic" move, meaning that the Fed is not overly concerned about recession and the job market. ING says EUR/USD is likely to trade in a narrow range ahead of the Fed's meeting later, as a 25 basis point or 50 basis point rate cut is very close. "If the Fed cuts by 50 basis points, and the market interprets it as a panic move, the dollar's weakness could be transmitted through the euro, yen and Swiss franc, while risk-sensitive currencies such as the Norwegian krone and Swedish krona could be impacted," said Francesco Pesole, ING analyst, in a report. However, he said the Fed should cut by 25 basis points, which could initially push the euro below $1.10 but may gradually recover in the following days. (Gold Ten)