Dollar trading stabilizes as investors await Fed decision

The US dollar remained stable during trading on Monday, as investors watched the developments of the Israeli-Iranian confrontation, which may be an indicator of a broader regional escalation.

This comes as markets prepare for a busy week of global central bank meetings, most notably the Federal Reserve meeting scheduled for Wednesday.

Expectations of steady interest rates with focus on Powell signals

Analysts expect the Fed to keep interest rates unchanged amid economic challenges, with markets focusing on the statements of its Chairman Jerome Powell, who may highlight:

- Increasing uncertainty about the growth and inflation forecasts.

- Rule out a quick cut in interest rates, with the bank ready to act if economic conditions worsen.

Rising regional tensions threaten oil supply disruptions

As the confrontation between Iran and Israel escalates with no signs of abating, concern is growing that Tehran may seek to disrupt the movement of oil through the Strait of Hormuz, one of the most important sea lanes for shipping crude globally.

This may lead to:

- Aggravation of economic risks due to supply disruptions.

- More volatility in the energy markets, especially after oil rose 1% today, following its strong gains of 7% last Friday following the Israeli strike.

Investors are now balancing the risks of geopolitical escalation in the Middle East and waiting for the guidance of central banks, with a special focus on the Federal Reserve, and the market may be looking for safe havens such as the dollar in case the situation worsens.

Follow our update at olxforex to find out the implications of these developments on the global markets.