The US dollar is trading within a tight range early on Friday as markets wait for upcoming updates from leading central banks, Fed included, on possible tightening of monetary policy as the economic outlook improves across the US and other parts of the world. At the time of writing, the US dollar index DXY is trading around 91.01.

After trading bullish through early on Thursday, the Euro fell after the ECB meeting as President Christine Lagarde shot down the possibility of easing the bank’s bond purchase program anytime soon. Markets were previously hopeful that the ECB will raise economic forecasts and signal the possibility of tightening its stance, like the BOC did earlier this week.

After ECB, the focus now shifts back to the Fed with its meeting scheduled next week, although now it seems likely that Powell will take a similar approach and maintain the status quo. Any hopes for tapering of bond buying have diminished after its European counterpart’s meeting in the previous session.

If Powell also decides to continue with the bond purchases, then the US dollar is likely to come under more pressure in the near term. However, if the central bank offers any signals about a possible timeline by when it could consider starting to tighten its policy, it could provide markets some reason to cheer and support the reserve currency.