Dollar Stays Firm Amid Fed Decision Anxiety

The US dollar held near a one-month high on Wednesday due to renewed Middle East tensions and investors' concerns about inflation, just hours before the Federal Reserve's rate decision.

Currency trading was cautious in early Asian hours as markets priced a 33% chance of a quarter-point rate hike. The dollar index remained around 101.43, with the euro near $1.1386 and the pound around $1.3282.

Japan is closely watching the Fed decision, with SMBC warning that the USD/JPY pair approaching levels officials are discussing could lead to Japanese intervention. This would involve Japan selling dollars and buying yen, potentially triggering a sudden drop in USD/JPY as traders rush to cut risk.