The market continues to trade with high volatility, jitters, and tight ranges ahead of the FOMC rate decision and Bernanke's press conference later today.

Rate disparities among central bankers and the outlook for monetary policies is still the evident sentiment in the market, keeping the dollar weak and majors stronger on their own monetary bets.

The dollar index hovered lower today and touched a fresh 16-month low at 73.48 and currently eased the losses to trade around 73.71 still below opening high of 73.79. Investors are still jittery on the dollar as they speculate the Federal Reserve to maintain its commitment to growth with low rates, and even as the QEII is likely to be confirmed to end in June some believe the Feds might still invest the return from the program which will keep the money flood and weak dollar.

Even with some speculating the feds to drop extended period on their comments on record low rates, still the majority do not see it as a possibility or even a close move from the feds compared to other central banks.

With Bernanke's press conference to provide the new projections and feds outlook today -the first of its kind- the market is further agitated over what could be the outcome and as 18:15 GMT approaches more volatility will be seen, especially as downbeat projections from the Federal Reserve might trigger a strong selling wave on risk aversion.

The movement has been tight so far and heavy movers where supported by their fundamentals over the dollar that further pinned the rate disparities. For Aussie the rise to a new multi-decade record was driven by the surge in consumer prices beyond expectations.

Aussie rallied to the record 1.0851 versus the dollar as consumer prices rose an annual 3.3% in the first quarter supporting the bet for RBA tightening. As for sterling, the 0.5% confirmed expansion eased the fear over stagflation and the return to recession in the UK and also bolstered sterling's gains on hope the split among the MPC will ease with growth.

The GBP/USD rallied higher to the high of 1.6580 from the lows of 1.6433 and now hovering around 1.6560 with the consolidation ahead of the US session with news on the queue ahead of the FOMC. The fluctuations might extend with the effect of negative momentum yet likely the pair will continue higher towards 1.66 areas.

As for the euro, the common currency still attempted to hold the gains against the weak dollar, though less than expected rise in new industrial orders from the area and the drop in German consumer confidence pressured the euro.

The euro is hovering now around 1.4670 after recording the high of 1.4712 and above the low of 1.4636. The negativity from momentum indicators and the anticipation of the Feds final decision is to keep the volatility high now and possible pressure a retest to 1.46 areas but the stability of those areas will keep the bias to the upside for the euro and possible reverse higher once again shall Bernanke remain upbeat on growth and downbeat on inflation!