Dollar Tumbles as Fed Holds Rates Steady Amid Escalating Middle East Conflict

The US Dollar tumbled on Wednesday after the Federal Reserve's (Fed) decision to leave interest rates unchanged. The Federal Open Market Committee (FOMC) voted 9-3 to maintain the federal funds target range at 3.50%-3.75%, with Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari, and Dallas Fed President Lorie Logan preferring a 25-basis-point increase.

The decision sparked a broad decline in the Greenback, pushing US Treasury yields lower and encouraging selling of the USD. The US Dollar Index (DXY) fell around 0.5% to trade near 100.90.

Meanwhile, major currencies reacted differently to the Fed's decision. The EUR/USD advanced around 0.7% to trade near 1.1470, while GBP/USD rose around 0.5% to trade near 1.3360. USD/JPY fell around 0.2% to trade near 163.50.

The escalation of the Middle East conflict has also had a significant impact on markets. West Texas Intermediate (WTI) Oil surged more than 7% to trade near $85 per barrel, while Gold rose around 0.7% to trade near $4,056 per troy ounce.