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EUR/USD reference rates at publication:

Spot: 1.1592High street bank rates (indicative band): 1.1186-1.1267Payment specialist rates (indicative band): 1.1488-1.1534Find out about specialist rates, hereOr, set up an exchange rate alert, hereThe Dollar's run higher might not yet be over, particularly if the Federal Reserve comes out as more 'hawkish' than the market had been expecting.

This is the most likely outcome to the November 03 policy update, says Dominique Dwor-Frecaut, a macro strategist at Macro Hive.

In a note to clients of the independent research and strategy house, Dwor-Frecaut says a $15bn monthly taper is a done deal.

But the statement will likely say inflation risks are now to the upside.

"I expect Chair Powell to be comfortable with current market pricing of 2022 policy hikes but refrain from saying so explicitly to maintain policy optionality and avoid pre-empting the December dot plot," says Dwor-Frecaut.

Pricing suggests the market sees about 2.5 hikes to have been called by the end of 2022.

"I see Powell as likely to feel comfortable with current 2022 pricing," says Dwor-Frecaut, because:

In the September SEP, the median 2022 dot already priced one hike.Since then, the FOMC has turned more hawkish.Powell likely sees the increase in the Q3 ECI to 1.3% from 0.7% in Q2 as signalling an emerging wage-price spiral.Since the GFC, the Fed has turned more hawkish. A persistent excess of actual unemployment over estimates of natural unemployment and inflation shortfalls relative to target show this.{wbamp-hide start}

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Of course Powell will be coy about how many rate hikes are appropriate in 2022, leaving investors to read between the lines.

Dwor-Frecaut says watch out for his views from his tone and answers to questions in the press conference – "notably, his views on the trade-off between inflation and unemployment, the sequencing of taper and policy rate hikes, inclusive employment and inflation expectations".

The Dollar has been bid over recent weeks on expectations for an ending to quantitative easing and the commencement of rate hikes in 2022.

Another hawkish policy outcome on Wednesday will likely only exacerbate this trend and could put the Euro to Dollar exchange rate (EUR/USD) on course for a test of 1.15 over coming days.