11:18 am - All Eyes on Bernanke: The Dollar Index is trading at the low end of the recent 80.50-81 consolidation range. Market participants await the Fed announcement this afternoon with the statement and projections due out at 2pm and the Fed Chairman press conference at 2:15pm. The speculation promises to run rampant, and while the Fed remains data dependent, market participants will look to be first to the door on signs of tapering. Some of this has already been priced in over the past couple of weeks. But the DXY promises to be volatile after the news which should break it out from its recent range.

• The euro continues to battle the 1.34 resistance level. It was a light day of news in Europe with a weak Spanish trade balance the only economic data of note. The single currency will be driven by moves in the dollar today. So a pop in the dollar on any signs of tapering, coupled with this 1.34 technical resistance, would likely send the euro tumbling lower.
• The pound is bouncing around in the 1.5650 area this morning. The currency has been holding this level since being rejected at the 200 dma (1.5700) late last week. The latest Bank of England minutes were released, but there was nothing new. The board continued to vote 6-3 against further asset purchases and all are in favor of the current 0.50% interest rate. The governorship will now turn to Mark Carney for the July meeting. This will prove to be more interesting for participants, rather than the recent lame duck sessions of the outgoing Mervyn King.
• The yen is trading around the 95 level ahead of the Fed meeting. This is another currency that promises to be volatile this afternoon. The 94-95 level has been providing resistance over the past week. The country's trade balance showed a slightly higher than expected deficit but it did not have a major impact on the currency.

10:01 am - Treasuries Hover Little Changed: Treasuries hover little changed as many traders remain on hold ahead of this afternoon's FOMC rate decision, waiting to see if any clues are provided to if/when the Committee may begin to taper its bond buying program. Light selling has developed across most of the complex with yields higher by less than 1 bp. The small uptick in yield has the benchmark 10-yr near 2.190%. Meanwhile, the long bond is slightly outperforming as an 11/32 advance has its yield off close to 1.5 bps at 3.328%. Slight steepening continues along the yield curve as the 2-10-yr spread trades wider at 191.5 bps. Elsewhere, precious metals are just off their best levels as gold trades up $6 at $1373 and silver is little changed near $21.70.

07:15 am - Dollar Steady Ahead of the Fed: The Dollar Index is flat near 80.65 following a rather quiet overnight trade that saw just a 15 cent range. Participants remain on hold as they await this afternoon's FOMC decision which is likely to provide clues as to if/when the Committee will begin tapering its asset purchase program. 

• EURUSD is -5 pips at 1.3390 amid after overnight trade was limited to a 25 pip range. The single currency has run close to 600 pips over the past month with action lingering near a four-month high. Any pullback will be greeted by 1.3200 support while a run through 1.3450/1.3500 sets up a test of the February highs near 1.3650/1.3700.
• GBPUSD is -5 pips at 1.5635 after the release of the latest Bank of England minutes. The minutes were from the last meeting with Mervyn King at the helm of the central bank and showed a 6-3 vote in favor of keeping the central bank's asset purchase program unchanged at its current GBP375 bln. Mark Carney will take over the reins of the central bank in July. The 1.5700 level continues to provide resistance with the help of the 200-day moving average while support rests in the 1.5500/1.5600 area.
• USDCHF is +15 pips at .9215 as trade continues to probe .9200 support. Little response has occurred on the heels of the unchanged Swiss ZEW Economic Expectations survey, which held at 2.2.
• USDJPY is -15 pips at 95.20 as trade has pulled back from its overnight high of 95.70. Action in the pair has been volatile after Japan posted its largest May trade deficit on record (JPY0.82 trln). The deficit came as exports surged 10.1% YoY, but imports jumped 10% as the weak yen made them more expensive.
• AUDUSD is +5 pips at .9490 after managing to survive an early test of .9450 support. Overnight, Australia's CB Leading Index crossed the wires, posting a 0.3% MoM advance (0.1% MoM previous). USDCNY ticked down to 6.1269.
• USDCAD is flat at 1.0115 as action holds on the 50-day moving average. Overnight buying provided a test of the 1.0250 level, but the gains were unable to hold. Canada's wholesale sales are due out later this morning.

06:50 am - Treasuries Flat Ahead of the Fed: Treasuries are little changed as traders remain on hold ahead of today's FOMC decision. Participants are not expecting any change from the current policy, but are on the lookout for clues as it if/when the Committee will look to begin tapering its bond buying program. Maturities across most of the complex hover flat while the long bond outperforms with 4/32 advance. The flat trade has all yields holding within 1 bp of yesterday's cash close with the 10-yr stuck near 2.185%. Little change along the yield curve has the 2-10-yr spread slightly wider at 191 bps. Elsewhere, precious metals are mixed with gold unchanged at $1367 and silver off $0.10 near $21.55. Today's data is limited to the weekly MBA Mortgage Index (7:30) with the main event being the FOMC rate decision, release of economic projections (14), and Fed Chairman Ben Bernanke's press conference (14:30).