The dollar is poised to weaken and track the movement of oil prices if the Federal Reserve decides to maintain its current interest rate on Wednesday, according to ING.

"If the Fed holds rates unchanged, the dollar will likely come under pressure and follow oil prices lower," ING strategists led by Francesco Pesole wrote in a note. This scenario suggests that a steady Fed policy, without further tightening, could reduce the dollar's appeal.

ING anticipates that the Federal Open Market Committee (FOMC) will keep its benchmark rate in a 5.25%-5.50% range this week. The focus will be on the Fed's updated economic projections and Chair Jerome Powell's press conference for clues on the future path of monetary policy.

While the Fed is widely expected to hold rates, any indication of future rate cuts could further impact the dollar. Conversely, if the Fed signals a more hawkish stance or a prolonged period of higher rates, it could provide support for the dollar, even if rates are held steady in the immediate term. The interplay between Fed policy, oil market dynamics, and the dollar’s trajectory will be closely watched by investors.