Dollar Pauses Ahead of Fed Rate Decision Amid Rising UK Inflation

The US dollar has paused near a two-week high ahead of the Federal Reserve's rate decision, where a 25 basis point hike is expected by 91% of market participants.

The UK inflation data released yesterday showed a 3.1% year-on-year increase in August, the highest since March, driven by higher fuel prices and rising airfares.

Despite this, the pound was little changed following the release, and expectations surrounding Bank of England rate hikes remain unchanged, with four hikes expected across the coming 12 months.