The dollar will trade with a downward bias. The market is pricing in an ECB rate hike Thursday and strong GDP report Friday.

There's increasing doubts (about a BOJ rate boost) due to developments in the stock market and the Sogo bankruptcy.

So in the background, too, is the notion that if there is any move to sell the dollar, there will be central bank intervention.

The view is that the market could withstand a 25 basis point rate hike.

What is helping the dollar is the moral persuasion of the central banks. There's been contact between the European Central Bank and national central banks that make up the ECB urging calm, urging a block on any kind of speculative trading. The Federal Reserve has also weighted in and asked that dollar trading be limited. I think that will support the currency.

For now the rate hike will have mostly a psychological impact on the market. Investors will probably use this as a reason to push prices down before re-entering the market at lower levels.