CNBC_ The US dollar traded in a narrow range against major currencies on Wednesday amid concerns that rising oil prices could reignite inflationary pressures, while markets await the US Federal Reserve meeting next week.
Shaun Osborne, an analyst at Scotiabank, stated that markets currently lack a clear direction as they await the Federal Open Market Committee meeting, which may provide signals regarding the path of US monetary policy.
Oil prices rose by more than two dollars per barrel, with Brent crude nearing its highest level in five months, after Iran indicated a lack of progress on the diplomatic track, coinciding with a decline in US crude inventories.
The dollar had declined last week, despite accelerating inflation in the US during September, amid continued market uncertainty regarding the trajectory of interest rates.
Concerns have also grown regarding the sustainability of the artificial intelligence boom and its impact on the US economy and financial markets.
Noah Buffam, a foreign exchange market expert at CIBC Capital Markets, stated that US economic growth heavily relies on artificial intelligence, which also contributes to sustaining inflation at levels above the target.
In a separate context, Elon Musk, CEO of Tesla and SpaceX, described the idea of merging the two companies as a "good idea," while Supermicro projected quarterly revenue and earnings exceeding Wall Street estimates.
In trading, the US Dollar Index, which measures the greenback's performance against a basket of major currencies, fell by 0.03% to 101.76 points.
The euro dropped by 0.11% to $1.1224, amid anti-government protests in France and growing concerns over the country's fiscal situation. French 10-year borrowing costs rose to their highest level in 24 years.
The British pound stabilized following gains recorded after data showed UK inflation rose higher than expected, reinforcing expectations of an interest rate hike by the Bank of England in November. The pound hit a 17-month high against the euro.
In contrast, the Japanese yen rose by 0.08% to 158.04 yen per dollar.
