Dollar Rebounds as Geopolitical Tensions Escalate

The US Dollar Index regained traction in early Thursday trading after a brief drop following the Federal Reserve's decision to keep interest rates unchanged. The central bank maintained its current rate range of 3.50%/3.75% as widely expected, but policymakers' divided views on policy added uncertainty about the Fed's next steps.

Despite the Fed's cautious stance, markets still bet heavily on a potential September rate hike and possibly another before the end of the year, supporting the dollar's recovery. The worsening geopolitical situation in the Middle East, with signs that conflict may spread to more countries, has increased pressure on the Fed to tighten policy further.

The technical picture remains bullish on the daily chart, with an ascending and thickening Ichimoku cloud underpinning near-term action. A break above the 20-day moving average (100.83) is seen as a minimum requirement to validate the initial positive signal.