The dollar advanced broadly against its major peers as markets braced for a U.S. Federal Reserve policy decision. Investors are also cautious due to ongoing geopolitical tensions and a packed earnings calendar featuring Amazon, Microsoft, and Meta.
The Federal Reserve is expected to maintain current interest rates, with focus shifting to its assessment of the war's impact on the economic outlook. "Nothing is expected from any of the policymakers in terms of hikes, and cuts are certainly off the table at this meeting," stated Marvin Loh, senior global macro strategist at State Street. "The Fed is likely to keep that hawkish bias that the market has pivoted to."
Meanwhile, oil prices climbed for an eighth consecutive session, with the June contract up 5.5 per cent at $117.42 a barrel. U.S. President Donald Trump reportedly discussed mitigating the impact of a potential blockade of Iran's ports.
The Japanese yen traded above 160 per dollar, approaching levels that historically prompt intervention, despite the Bank of Japan signaling potential rate hikes. The yen has weakened against the dollar, partly due to Japan's vulnerability to rising imported energy costs. The yen was last down 0.36 per cent at 160.17 per dollar.