Markets Turn Cautious Amid Middle East Tensions and Ahead of Fed Decision

Financial markets turned cautious on Wednesday as escalating tensions in the Middle East pushed investors toward safer assets. This risk-averse mood kept major currency pairs within relatively narrow trading ranges during the European session.

The US Dollar Index struggled to gain from the broader risk-averse sentiment, remaining steady at around 101.30 during the European session. Investors waited for the Federal Reserve's policy announcement, which is expected to provide further direction for currency markets.

The euro held near 1.1400 against the US dollar as investors avoided making significant moves before the Fed decision. The pair followed small gains recorded on Tuesday and remained relatively stable amid broader market caution.