Dollar Holds Firm Amid Middle East Tensions and Federal Reserve Decision

The US dollar maintained its stability near a one-month high on July 29 as investors turned to safe-haven assets following renewed tensions in the Middle East.

The rise in oil prices, triggered by the U.S. military's confirmation of intercepted ballistic missiles from Iran towards American forces, added to concerns about inflation pressures and geopolitical instability.

Market participants remained cautious ahead of the Federal Reserve's interest rate decision, with a 33% probability of a 25 basis point rate increase indicating uncertainty over the Fed's approach to monetary policy.

Fabien Yip, a market analyst at IG, expects the central bank to maintain interest rates at the current level, as policymakers continue evaluating inflation trends and economic conditions.