Dollar Holds Firm Amid Escalating Middle East Tensions

The dollar remained stable on Wednesday as rising tensions in the Middle East drove up oil prices and heightened concerns about inflation.

The US launched airstrikes against Iran, prompting Iranian retaliation, which sent Brent futures up 0.92% to $95.52 a barrel and WTI crude 0.89% higher at $91.02, according to Reuters.

Kumiko Ishikawa, a senior FX analyst at Sony Financial Group, noted that 'continued vigilance is needed over the situation in the Middle East today.'

The dollar index held steady at 99.67, while markets now price in a 67% chance of a September Federal Reserve rate hike, up from around 40% a week earlier, according to CME Group's FedWatch tool.