DXY Consolidates Ahead of Crucial FOMC Meeting Amid Iran Tensions

The US Dollar Index (DXY) remains relatively flat below the key level of 101.50, as traders await the outcome of the FOMC meeting later this Wednesday.

Persistent geopolitical uncertainties continue to drive demand for safe-haven assets, with the DXY benefiting from rising inflation fears and Fed rate hike bets.

The recent attack by Iran's IRGC on US forces in the Middle East has fueled concerns about a fresh escalation of tensions in the region, prompting traders to price in the geopolitical risk premium.

Meanwhile, the sharp rally in crude oil prices revives inflation fears and raises prospects for an interest rate hike by the Fed, which may further support the DXY.