Dollar Holds Near One-Month Highs Ahead of Fed Decision

The US dollar paused its rise on Wednesday, July 29, ahead of the Federal Reserve's interest rate decision. Despite holding near one-month highs, the dollar index eased by 0.08% to 101.33.

Hostilities in the Middle East flared anew after joint strikes by the US and Saudi Arabia on Iran-backed groups in Iraq. This led to higher oil prices.

Nick Rees, head of macro research at Monex Europe, said: 'We have seen a breakdown in that tentative ceasefire in the Middle East overnight.'

Markets are pricing in a roughly 30% chance of a 25-basis-point hike. Some brokerages believe there is a growing risk of a surprise rate hike.

The euro was nursing losses after falling to a one-month low in the previous session and inched up 0.09% to $1.1395.