Dollar Trades Sideways as FOMC Decision Looms Amid US-Iran Tensions

The US dollar has been trading steadily ahead of the Federal Open Market Committee's (FOMC) decision, amidst renewed tensions between the US and Iran. Markets are also keeping a close eye on upcoming economic data from both the Eurozone and the United States.

According to InvestingLive.com, the Federal Reserve is expected to maintain interest rates at 3.50%, 3.75%, with up to two dissenters potentially favoring a rate hike during the meeting. The focus will be on whether Fed's Logan and/or Hammack will vote in favor of a rate increase.

The Eurozone's European Central Bank (ECB) has left rates unchanged, but hinted at potential hikes if inflation worsens. ECB policymaker Peter Kazimir stated that 'at least one more increase will likely be needed to bring inflation under control.'

EUR/USD is consolidating below the key 1.14 resistance level, with sellers expected to defend this zone while buyers await a breakout to target 1.16. The currency pair's near-term direction heavily depends on the FOMC outcome.