Dollar Falters Ahead of Surprise Rate Hike Risk
The US dollar paused its ascent on Wednesday ahead of the Federal Reserve's interest rate decision, but remains near one-month highs. The dollar index, which tracks the US currency against a basket of six others, eased 0.08% to 101.33.
Investors are waiting for the Fed's decision, where some analysts believe there is a growing risk of a surprise hike. The market is pricing in a roughly 30% chance of a 25-basis-point hike.
The recent spike in oil prices due to renewed tensions in the Middle East has increased concerns about inflation. Oil prices rose after joint strikes by US and Saudi Arabia on Iran-backed groups in Iraq.
Despite the volatility, currency markets are largely subdued ahead of the Fed decision, with many investors staying on the sidelines.