Dollar Holds Firm Amid Ongoing Middle East Tensions

The US dollar remained near its one-month high on Wednesday as renewed Middle East tensions led to higher oil prices and investors awaited the Federal Reserve's interest rate decision.

Hostilities flared anew in the region, causing the Australian dollar to fall by 0.37% after inflation data came in below expectations, reducing the likelihood of further rate hikes from the Reserve Bank of Australia.

The US dollar was firm at 101.38 against its peers and near a 40-year peak against the yen at 163.74.

Sim Moh Siong, a strategist at OCBC, expects no Fed hike but notes that 'the messaging will be more important than the decision' if the Fed stays on hold and provides hawkish guidance.