Dollar Holds Near Highs as Markets Await Fed Decision

The U.S. dollar has held near multi-week highs as markets await the Federal Reserve's rate decision, which is expected to be the first hike in a series of increases.

Inflation pressures have been reinforced by the surge in energy prices linked to the Middle East conflict, pushing Treasury yields higher and complicating the inflation outlook for economies that rely heavily on energy imports.

The Bank of England's policy decision on Thursday is also being closely watched, with markets leaning towards a hold despite a renewed rise in U.K. inflation.

The yen has fallen to a one-week low against the dollar, while Asian currencies traded mixed, with the EUR/USD pair rising 0.07% and the GBP/USD pair around 1.35.