Dollar Slips as Markets Price 30 Percent Chance of Fed Hike

The US dollar slipped by 0.10 percent to 101.165 as markets priced in a 30 percent chance of a Federal Reserve hike.

Currency traders avoided major positions ahead of the Fed's decision, which could determine whether recent expectations for higher interest rates continue supporting the greenback.

The dollar index, measuring the US currency against a basket of major peers, declined by 0.10 percent to its lowest level since Tuesday, when it reached 101.63 - its strongest point since June 25.

Markets assigned an approximately 30 percent probability to a quarter-percentage-point rate increase, with investors waiting for the Federal Open Market Committee's announcement later in the day.

The cautious trading environment came as renewed Middle East hostilities pushed oil prices higher, with the United States and Saudi Arabia launching strikes against Iran-backed groups in Iraq, saying they were responsible for drone attacks on Saudi oil facilities.