Dollar Holds Steady Ahead of Expected Rate Hike

The US dollar is holding onto recent gains ahead of a Federal Reserve decision that's expected to bring the first interest rate hike in months.

Currency strategists at Commonwealth Bank of Australia and BNP Paribas expect a modest boost for the dollar if the Fed increases rates, but warn that a failure to do so could lead to a sharp 1%+ fall in the dollar's value.

The dollar has been gaining traction over the past few sessions as traders bet on the Fed's decision to hike rates several times to combat inflation fueled by the ongoing war with Iran and energy price surges.

However, some experts are skeptical that even multiple rate hikes will be enough to restore the Fed's credibility in the markets.