Now I am not saying the Fed will try to push the dollar lower tomorrow but it is what I would do if I was on the FOMC. I am also not saying that any dollar losses from such a strategy would be long lasting but it might give the Fed some breathing room if it decides to raise rates sooner (e.g. July or September) rather than later (e.g. October or December). In any case, keep an eye on the statement and press conference to see if and/or the extent the FOMC cites the strong dollar as a headwind.

Jay Meisler is the founder of the Global Traders Association

One way to do this is for the FOMC to state that the strong dollar is a serious headwind on the economy. The FX market would likely jump on this and push the dollar lower as it would imply the value of the currency is a factor in setting monetary policy.

2) With the risk of a Greek debt default increasing, a weaker dollar would give the forex market a cushion if the worst case materialized in this never ending Grexit soap opera.

Why Should the Fed Seek to Push the Dollar Lower?

1) In the current environment a weaker dollar would give the Fed more leeway as to the timing of its first rate hike in the process if normalizing monetary policy. It would not have to worry about pushing the dollar through recent highs if the currency started from a lower base.

On Wednesday all eyes will be on the FOMC decision with attention focused on the accompanying statement and the press conference with Fed Chair Yellen.that follows, If I was in the shoes of the FOMC, I would seek to give myself some breathing room by looking to drive the dollar lower. While exchange rate policy is the responsibility of the US Treasury, the FX market will be sensitive to any comments from the Fed on the dollar.