Traders await the Federal Reserve’s policy announcement as geopolitical tensions and oil price surges add volatility to currency markets.
The EUR/USD pair remains below 1.1400, trading at 1.1393, as investors await the Federal Reserve’s interest rate decision at 18:00 GMT. The US Dollar initially strengthened on escalating Middle East tensions but pared gains ahead of the announcement.
The Fed is expected to keep rates steady in the 3.50%-3.75% range, though a 25-basis-point hike remains possible if inflation concerns grow. The CME FedWatch Tool shows a 30% chance of an increase. Oil prices surged over 5% to $83 as shipping disruptions in the Strait of Hormuz persist.
The US Dollar Index (DXY) fluctuated, peaking at 101.49 before settling near 101.35. Market focus remains on the Fed’s guidance amid heightened geopolitical risks.