US Dollar Holds Ground Ahead of FOMC Meeting Amid Renewed US-Iran Tensions

The US dollar continued to hold its ground despite a sharp decline in crude oil prices following renewed US-Iran negotiations, indicating underlying demand for the greenback ahead of this week's FOMC meeting.

The Fed is expected to keep interest rates steady at the upcoming meeting, but markets will closely watch Chair Kevin Warsh's comments on Middle East tensions and potential inflationary pressures.

With 55% chance of a rate hike in September and 39% in December, according to Fed funds futures, the US dollar has scope to remain supported. Whether it extends its lead will depend on Warsh's guidance and any dissenting votes in favor of a rate hike.