Dollar Holds Firm; Fed Surprise Looms
The US dollar remained near a one-month high during Wednesday's trading (July 29). The US Dollar Index hovered around 101.20, despite a slight decline of 0.06%.
Investors are exercising caution ahead of the Federal Reserve's interest rate decision. Some analysts anticipate that the US central bank could still spring a surprise by raising interest rates.
The euro traded narrowly around US$1.139 after previously touching a one-month low. The pound also traded within a tight range near its lowest level since early July, ahead of the Bank of England's decision.
Dollar strength was further bolstered by escalating conflict in the Middle East. The United States and Saudi Arabia launched strikes against an Iran-backed group in Iraq.
The strikes followed the US military's announcement that it had successfully thwarted a surprise Iranian attack on American forces. These tensions drove oil prices up by more than 3% and reignited concerns regarding energy-driven inflation.
Markets currently estimate a roughly 36% probability that the Fed will raise interest rates by 25 basis points. Should the Fed signal a hawkish stance, the dollar could strengthen, while the euro, pound, gold, and risk assets might face renewed downward pressure.
Source: Newsmaker.id
