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Dollar steadies ahead of FOMC as oil jumps on Iran tensions
The dollar index is down 0.02%, while markets price a 34% chance of a 25 bp Fed hike after crude surged more than 6%.
The dollar held near flat levels ahead of the end of a two day FOMC meeting, with the dollar index down 0.02% as it recovered from overnight losses, according to Yahoo Finance. Moves were capped by anticipation that Fed policymakers will keep interest rates unchanged later today, while crude oil climbed more than 6% following a new round of Iran related escalation. Yahoo Finance said the oil jump followed claims by Iran's Islamic Revolutionary Guard Corps that it targeted a US airbase and command center in Jordan with ballistic missiles and halted tankers attempting to transit through the Strait of Hormuz. It also cited a US and Saudi joint attack in Iraq against Iran aligned targets tied to directions from the IRGC. Against that backdrop, the markets are discounting a 34% probability of a 25 bp rate hike at the conclusion of today's FOMC meeting, while the euro was up 0.04% on mild dollar weakness. The euro's gains were limited by the same crude surge, which can raise inflation expectations and weigh on an energy importing region, Yahoo Finance added, with markets pricing an 89% chance of a 25 bp ECB rate hike on September 10.
Latest closeWTI crude $84.21 ▼0.3%|Dollar index 99.97 ▼0.8%