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Dollar index holds below 101.50 ahead of Fed decision amid Iran risks

The DXY is consolidating under 101.50 as geopolitical uncertainty around Iran supports safe-haven demand and traders await cues on the Fed's path after a two-day meeting.

Reported · Written up by our desk · Major Pairs

The US Dollar Index, which tracks the greenback versus a basket of currencies, was seen consolidating below 101.50 during the Asian session while holding a bullish undertone near an over one-month high, according to FXStreet.

Traders are waiting for the outcome of a two-day Federal Reserve meeting due later this Wednesday, with attention also focused on fresh Middle East tensions after Iran's Islamic Revolutionary Guard Corps launched a surprise attack that targeted US forces with multiple ballistic missiles late Tuesday.

FXStreet said investors are factoring in a geopolitical risk premium that can support the safe-haven USD, even as a rally in crude oil has revived inflation concerns and raised the prospect of a US rate hike.

The outlet cited economists at DBS highlighting that investors remain highly cautious into the FOMC decision, with the market still assigning 34% odds to a hike this week and nearly 100% odds for tightening at the September meeting.

Latest closeWTI crude $81.23 ▼1.7%|Dollar index 101.39 ▼0.1%

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