The Dollar ended last week strong as the US tax reform bill seems to be just one step from being approved and passed into law shaping expectations for a positive finish for the year. The greenback had been under pressure after the Fed rate decision and Janet Yellen's remarks on the stickiness of low inflation earlier in the week. However, when news that Republican Senators Rubio and Corker decided to support the proposed legislation hit the wires Dollar bulls rejoiced and drove the currency higher.

The Euro was front and center yesterday on the back of the ECB rate decision and Mario Draghi's press conference that followed but unfortunately for the Euro bulls the takeaway was not as bullish as they would have liked. The European Central Bank left rates unchanged but it was Draghi's remarks that were expected to shape expectations for 2018. Even though the Italian policymaker acknowledged the progress in the Eurozone finances and the central bank upgraded their forecasts for the next few years the Euro was not able to sustain its initial gains and instead retreated below 1.18 again.

Two major central bank meetings and rate decisions will dominate the news today with the ECB and the BoE releasing their monetary policy decisions over the next 24 hours. Both events are expected to take a toll on the price direction of the Euro and the Pound as traders are eager to find out what they should expect from the two European central banks during the next year. The ECB event will likely have a bigger impact compared to the BoE decision as President Mario Draghi will also be hosting a press conference after the rate decision to discuss his forward guidance.

Markets today will be focused on the Fed Rate Decision late in the evening looking to assess what to expect from the Dollar in the next year. As we have discussed in our previous notes, the Fed is widely expected to raise interest rates for the last time this year during today's meeting but the important question is what kind of guidance traders will receive to accompany the decision. This will be Janet Yellen's last meeting as the head of the US central bank as she will be replaced by Jerome Powell early next year; it will be interesting to see whether she provides markets with her outlook on the economy or prefers to say as little as possible allowing Powell to shape future expectations when he formally succeeds her.