Dollar Stays Firm as Markets Await Fed Decision Amid Ongoing Middle East Tensions
The US dollar remained strong on Wednesday, buoyed by safe-haven flows after hostilities flared anew in the Middle East. Markets are awaiting a key Federal Reserve interest rate decision later in the day, with a 33% chance of a 25-basis-point hike.
Oil prices rose again as the US military intercepted multiple ballistic missiles launched by Iran towards US forces in the region. This persistent strength left the euro languishing near a one-month low at $1.1386, having fallen 0.3% for the month thus far.
Fabien Yip, a market analyst at IG, expects the Fed to keep interest rates on hold later on Wednesday, saying 'I still think that the Fed will need more indication on how long the inflation risk is going to play out.'
The dollar was firm at 101.43 against its peers and rose slightly against the yen to 163.88, putting pressure on the weakened Japanese currency.