Dollar Strengthens Amid Middle East Tensions and Fed Decision Awaited

The U.S. dollar has strengthened against major currencies, driven by geopolitical tensions between Israel and Iran and anticipation of the Federal Reserve's interest rate decision. Despite previous losses, the dollar saw significant gains, reinforcing its status as a safe-haven asset amid global risk aversion. Upcoming central bank announcements continue to impact investor sentiment.

In a climate of rising geopolitical tensions and pending economic decisions, the U.S. dollar retained its strength against major global currencies on Wednesday. This development comes amid escalating conflict between Israel and Iran, as investors seek safety ahead of an anticipated interest rate decision by the Federal Reserve.

The ongoing conflict in the Middle East, exacerbated by Israel's recent actions against Iran, has heightened fears of broader U.S. military involvement. Such intervention could impact regional energy resources and supply chains. Consequently, investors have flocked towards the dollar, firming it by roughly 1% against the yen, Swiss franc, and euro since last week.

As financial markets await central bank verdicts, speculations about the Fed's stance on interest rates dominate discussions. While the dollar maintained its safe-haven status, U.S. economic uncertainties and rising crude oil prices further complicated the Federal Reserve's policy outlook, especially with President Trump's unpredictable trade policies affecting global economic relationships.

(With inputs from agencies.)