Dollar Holds Steady as Fed Decision Looms Amid Middle East Tensions

The US dollar held steady on Wednesday near a one-month high as investors awaited the Federal Reserve's interest rate decision. The dollar was buoyed by safe-haven flows after hostilities flared anew in the Middle East.

Oil prices rose again after the US military intercepted multiple ballistic missiles launched by Iran towards US forces in the region. This added to inflation fears, which could influence the Fed's decision.

Market analyst Fabien Yip from IG expects the Fed to keep interest rates on hold, saying 'I still think that the Fed will need more indication on how long the inflation risk is going to play out.'

The dollar was firm at 101.43 against its peers and rose against the yen to 163.88, putting pressure on the weakened Japanese currency.