Dollar Holds Near Monthly High Amid Middle East Tensions and Fed Decision

The US dollar held near its monthly high on Wednesday as tensions in the Middle East escalated and traders waited for the Federal Reserve's interest-rate decision. The sudden flare-up in the region, combined with softer Australian inflation data, left investors bracing for potential volatile currency moves.

According to analysts, the outcome of the Fed's decision and signals from Japanese regulators could determine the dollar's trajectory in the coming days. Sim Moh Siong noted that during the meeting, 'it is evident that the Fed is moving in a more hawkish direction.'

The Australian dollar fell after inflation data came in weaker than expected, reducing the odds of further rate hikes by the Reserve Bank of Australia.