Dollar Index Pulls Back After Fed Holds Rates Steady

The US Dollar Index (DXY) continued its pullback on Wednesday, dropping to 101.2 after reaching a 15-month high of 101.6 the previous day.

The index had been testing this high despite expectations for a rate hike from the Federal Reserve, with some market participants positioning for a move by the central bank due to mounting pro-inflationary risks and a strong labor market.

However, the Fed ultimately held interest rates unchanged, leading to three committee members dissenting in favor of a hike.

The pullback in the dollar occurred despite a surge in oil prices due to tensions between the US and Iran, which increased concerns about an energy shortage from the Middle East.