FX.co ★ Dollar Finds Support on Higher Oil Prices

The US dollar index held near 101.7 on Wednesday after touching a three-week low in the previous session, supported by a renewed rise in oil prices that revived inflation worries and bolstered safe-haven demand for the greenback. Crude resumed its upward trajectory after a diplomat disputed reports that a deal to end the US–Iran conflict was imminent, while noting that negotiations are still in progress.

In monetary policy, the US Federal Reserve is widely expected to leave interest rates unchanged at next week’s meeting, with markets still pricing in the possibility of a rate increase in December.

In currency markets, the yen traded in a tight range as the Bank of Japan is anticipated to hold its policy rate steady next week, before potentially raising it in December. The euro also found some stability after weakening earlier in the week amid violent protests in France and other European countries, with the recent easing of widespread unrest helping to limit further losses.